How to Calculate RevPAR and ADR for a Short-Term Rental

The arithmetic behind RevPAR is a single multiplication. The part that goes wrong is never the math, it is the definitions: two operators can each calculate RevPAR correctly and still produce numbers that mean different things, because they quietly disagreed on what counts as revenue, a booked night, or an available one.

TL;DR: RevPAR equals ADR x occupancy, or rental revenue / available nights over the same period. ADR equals rental revenue / booked nights. Occupancy equals booked nights / available nights. RevPAR is always at or below ADR, equal only at full occupancy. The numbers are trivial; the discipline is holding one definition of revenue, booked nights, and available nights across every property and benchmark. Informational, not financial advice.

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The three formulas

Everything here is built from three definitions, so state them precisely once.

ADR = rental revenue / booked nights

occupancy = booked nights / available nights

RevPAR = ADR x occupancy = rental revenue / available nights

The last identity is worth seeing algebraically: ADR x occupancy = (revenue / booked) x (booked / available) = revenue / available. The booked nights cancel, which is why the two RevPAR forms are the same number and why RevPAR does not depend on how many nights you sold, only on the revenue and the calendar (per AirDNA, reviewed July 2026).

One consequence to keep in your head: because occupancy is never above 100 percent, RevPAR is always less than or equal to ADR, and they meet only when every available night booked.

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Step by step

Take one property over one period and run it.

1. Set the period and count available nights. Pick a clean window, a calendar month is typical. Count the nights the property was actually listed and bookable. Decide now whether a night you manually blocked counts as unavailable or as vacant, and write the choice down.
2. Count booked nights and total the rental revenue. Add up the nights that sold and the revenue they produced, on a single consistent basis: decide whether revenue is gross booking value or net of the OTA commission, and whether the cleaning fee is in or out.
3. Compute ADR. Divide rental revenue by booked nights. That is your average sold-night price.
4. Compute occupancy. Divide booked nights by available nights.
5. Compute RevPAR. Multiply ADR by occupancy, or divide the same revenue by available nights. The two must match; if they do not, an input was counted on two different bases.

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A worked example (illustrative, hypothetical)

Round numbers, chosen to make the arithmetic clean. Not a projection for any real property.

The month:

• Available nights: 30
• Booked nights: 18
• Rental revenue on booked nights (net of OTA commission, cleaning fee excluded, held consistent): 3,600 dollars

The metrics:

• ADR: 3,600 / 18 = 200 dollars
• Occupancy: 18 / 30 = 60 percent
• RevPAR: 200 x 0.60 = 120 dollars, and as a check 3,600 / 30 = 120 dollars. They agree.

So every available night earned an average of 120 dollars, across the 18 that booked at 200 and the 12 that earned nothing.

Now watch a single-lever move. Push ADR to 240 dollars but lose bookings to 13 of the 30 nights (43 percent): RevPAR is 13 x 240 / 30 = 104 dollars, lower despite the higher rate, because the extra 40 dollars a night did not cover the nights you stopped selling. The ADR chart went up and the business went down. RevPAR caught it; ADR alone would not have. That trade-off is the subject of RevPAR vs ADR vs occupancy.

If you include the cleaning fee

Say the 18 booked nights were 18 one-night stays, each carrying an 80 dollar cleaning fee (the maximum case; fewer, longer stays would add less cleaning revenue), and you follow a source that folds cleaning into ADR (AirDNA does, per AirDNA, reviewed July 2026). Revenue becomes 3,600 + 18 x 80 = 5,040 dollars, ADR becomes 5,040 / 18 = 280 dollars, and RevPAR becomes 5,040 / 30 = 168 dollars. Same property, same month, a 40 percent higher RevPAR, purely from a definition choice. This is why the convention matters more than the number.

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Common mistakes

• Dividing revenue by booked nights and calling it RevPAR. That is ADR. RevPAR divides by available nights. Using booked nights inflates the figure and hides your vacancy, which is the exact thing RevPAR exists to show.
• Mixing cleaning-fee conventions. As the example shows, including cleaning fees can swing RevPAR by double digits of percent. Comparing a cleaning-inclusive market benchmark to your cleaning-exclusive number is comparing two different metrics.
• Comparing gross RevPAR to net RevPAR. Gross booking value and revenue net of the OTA commission are not the same number. Pick one basis and hold it everywhere.
• Counting blocked nights inconsistently. Owner stays, maintenance blocks, and manual holds can be treated as unavailable or as vacant. The choice moves occupancy and therefore RevPAR. It is not wrong either way; it is wrong to switch between properties.
• Benchmarking against a different calculation. When you pull a market RevPAR from a data provider, match your revenue, cleaning, and availability definitions to theirs before concluding you beat or trail the market.

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The point of getting it right

The reason to be pedantic about definitions is that RevPAR is a comparison metric. Its whole value is in the delta: this property versus that one, this month versus last year, you versus your submarket. A number computed on shifting definitions has no stable delta, so it cannot answer the question you built it for.

Once your RevPAR is clean and consistent, it becomes the fast read on whether your pricing strategy is compounding. To make sure the rate underneath it clears costs, run your break-even occupancy, and to judge the revenue against the capital behind it, use cash-on-cash return. For what RevPAR is and why it beats watching rate or occupancy alone, start with the RevPAR pillar.

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Disclaimer: This article is informational only and is not financial, investment, or tax advice. Figures in the worked example are illustrative and not a projection for any specific property. Verify current platform fees and market data against primary sources before pricing or underwriting. Information current as of July 2026.