However, there also are operating expenses unique to an STR property, including: If an STR is booked for a total of 18 nights in a month and there were 3 unique bookings, the ALOS would be 6.0 nights.īoth long-term and short-term rental properties have similar expenses, such as repairs and maintenance, property taxes and insurance, homeowner association fees, and the monthly mortgage if the home is financed. As the occupancy rate increases, RevPAR comes closer and closer to the ADR figure.Īverage length of stay (ALOS) is calculated by dividing the number of nights booked in a period by the number of bookings. In this example, by multiplying the occupancy rate of 60% by the ADR of $250, we end up with a RevPAR of $150. Note that occupancy rate, ADR, and RevPAR all interact with one another. For example, if gross revenue is $4,500 in a month with 30 days/nights, the RevPAR would be $150. Revenue per available room (RevPAR) is calculated by dividing gross revenue by the number of nights a room was available, whether or not it was booked. If the gross revenue in a month is $4,500 and 18 nights were booked, the ADR would be $250. If an STR is booked for a total of 18 nights and there are 30 available nights in the month, the occupancy rate would be 60%.Īverage daily rate (ADR) is calculated by dividing gross revenue by the number of nights booked. To calculate the occupancy rate, divide the number of nights rented by the number of available nights. If occupancy is lower than average for other STRs in the area, pricing may need to be marked down or amenities added to justify a higher rate. Keeping an eye on the occupancy rate can reveal if the nightly rate on an STRis priced correctly. Total amount of income generated each month, including nightly rate plus extra services such as guided tours, child care or pet sitting, and extra cleaning or other services paid for by a guest. There are 11 key metrics to include on a spreadsheet to help you stay on top of property performance:
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