RevPAR is revenue per available night — average daily rate multiplied by occupancy — so a listing at £140 a night running 65% occupancy has a RevPAR of £91, or £33,215 a year. It is the single most useful metric in short lets because it is the only one that cannot be gamed by trading rate against volume. Occupancy alone flatters discounters; nightly rate alone flatters empty premium listings. RevPAR prices both on the same scale.
The detail
Compare two listings in the same building. Listing A charges £200 and runs 45% occupancy: RevPAR £90, 164 booked nights. Listing B charges £110 and runs 80%: RevPAR £88. On top line they are a dead heat — but B does 292 booked nights, which at a three-night average stay is roughly 43 extra changeovers a year. At £60 a clean that is £2,600 of cost difference on identical revenue. RevPAR tells you they are equal; the changeover count tells you A is the better business.
For investment screening, the useful derivative is annual RevPAR against purchase price. Multiply RevPAR by 365 and divide by what the property costs: that is your gross short-let yield, directly comparable across markets and directly comparable to a long-let gross yield. In the markets we track, 9% or better is the threshold worth shortlisting, and anything under 7% needs an unusually cheap cost base to survive leverage.
One calculation discipline matters: compute RevPAR over 365 nights, not over the nights you chose to make available. Availability-based RevPAR rewards blocking your calendar, which is exactly backwards for an investment decision.
The numbers that matter
Where this stops holding
RevPAR is a revenue metric and says nothing about margin, so it breaks down as a comparison tool the moment two properties have different cost structures — a fifth-floor walk-up with no lift and a ground-floor flat with parking can post identical RevPAR and very different net. It also collapses seasonality into a single figure, which hides the working-capital problem in markets that earn 70% of the year's revenue in four months. Use RevPAR to shortlist, then model the monthly curve before you commit.
Sources
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A HostPal Invest report runs the real occupancy, nightly rate, RevPAR, regulation risk and a buy / wait / avoid verdict for one specific property or drawn area, in any of 117 markets — not a national average. Street-Level reports from £29.