Certified Hospitality Manager (CHM) Practice Exam

RevPAR stands for "Revenue Per Available Room," and it is a key performance metric in hotel management that measures the revenue generated per available room, regardless of whether that room is occupied or not. This figure is crucial for hotel operators and owners because it provides insight into how well a hotel is performing in terms of its room inventory.

Calculating RevPAR involves multiplying the average daily room rate (ADR) by the occupancy rate. This metric enables hotels to evaluate their revenue efficiency and is especially useful for comparing performance across different time periods or against competitors. A higher RevPAR indicates better overall financial health, as it suggests the hotel is effectively managing both occupancy and room pricing strategies. Monitoring RevPAR helps in making informed decisions regarding marketing, pricing strategies, and operational improvements.

In contrast, the other options do not accurately represent the term or its function within the hotel management context. They either specify incorrect meanings or terms that are not relevant to the financial metrics used in hotel operations.