What occupancy actually measures
Occupancy is rooms sold divided by rooms available to sell for a night. The mistake sits in the denominator: rooms that are broken, under repair or given to staff are not available to sell, yet manual spreadsheets usually keep the hotel's full room count. The reported figure comes out lower than reality, and the manager goes hunting for a problem that is not there.
ADR is what you collect, not what you advertise
ADR is room revenue divided by rooms sold. It is the average a guest actually paid after discounts, promotions and channel commission — not the rate on your website. A hotel selling heavily through high-commission intermediaries can show attractive published rates while its ADR stays low, and ADR is the number that reflects the bank account.
RevPAR folds both together
RevPAR is room revenue divided by all rooms available to sell, empty ones included. Put another way, RevPAR equals ADR times occupancy. It answers a single question: for every room you hold, sold or not, how much is it earning per night. This is the number you can compare across months and across hotels of different sizes.
Why all three must be read together
Cut rates deeply and occupancy rises, which feels good, but ADR falls and RevPAR may stay flat or drop — meaning you served more guests, spent more on labour and utilities, and collected the same. Hold rates high with many empty rooms and ADR looks great while RevPAR is dismal. Only when all three rise together are you genuinely selling better.
Errors that keep appearing in manual maths
Four mistakes repeat in the spreadsheets we have reviewed: folding food, beverage and service revenue into room revenue, which inflates ADR; forgetting to remove out-of-order rooms from the denominator; counting reservations instead of room nights, so a multi-night stay is counted once; and each shift closing the numbers its own way, so nothing reconciles at month end.
Making it part of daily work
These numbers only help if you can see them daily rather than learning them at month end. That requires every room transaction to pass through one place, out-of-order rooms to be flagged on the room plan as it happens, and service revenue to be separated from room revenue at the moment it is recorded. When data lands in the right place from the start, reporting stops being a task someone has to sit down and do.