Revenue Per Available Square Meter (RevPAM) is a hotel KPI that measures a hotel’s ability to generate revenue from its banquet and conference spaces. Consequently, RevPAM only applied to hotels that rent space for banquets or conferences, and does not include revenue from room charges or breakfast offerings.
What is Revenue Per Available Square Meter (RevPAM) For?
RevPAM is a calculation of the revenue a hotel generates per available square meter when it rents rooms for a banquet or conference. It is a good measurement of the efficiency of a hotel’s sales department in maximizing revenue from banquet and conference sales.
Benefits of Revenue Per Available Square Meter (RevPAM)
RevPAM is a good metric of how well a hotel is utilizing its banquet and conference space. RevPAM can be used in conjunction with other hotel revenue KPIs (such as RevPAR) to better understand the pros and cons of accepting group bookings. Because RevPAM does not include revenue from room charges or breakfast, it can be used to evaluate in-hour conference and banquet guests, as well as guests that aren’t staying at a hotel.
Limitations of Revenue Per Available Square Meter (RevPAM)
RevPAM is not a useful KPI for a hotel that does not regularly rent out its hotel or banquet space. It also does not tell the full story of a hotel’s profitability because it only applies to a hotel’s events department.
How is Revenue Per Available Square Meter (RevPAM) Calculated
RevPAM is calculated by dividing revenue by a hotel’s available square meters of banquet space. For this metric, revenue should not include room charges or revenue from breakfast F&B.
Example of Revenue Per Available Square Meter (RevPAM) Calculation
RevPAM = Revenue / Available Square Meters of Banquet Space (m²)
Revenue = $580,000
Available Square Meters of Banquet Space = 2,000
RevPAM = $580,000 (Revenue) / 2,000 (Square Meters of Banquet Space) = $290