Do you know what the term for gaming sector/industry is? It’s RevPAR (according to Motley Fool), short for “Revenues Per Available Room“. RevPAR is used to gauge the revenues that a company is making from each of 
its hotel rooms (incorporates both occupancy and room rates).
For example, assume that a company managed 10,000 rooms last quarter, which were occupied three-fourths of the time at an average daily rate (ADR) of $120. The total revenues for the quarter would be calculated as follows:
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10,000 rooms x 90 days in the quarter x $120 ADR x 75% occupancy rate = $81 million.
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dividing $81 million in revenues by 900,000 (10,000 x 90 days) available rooms yields a RevPAR figure of $90
Some case-studies of the gaming industry’s biggest players statistic:
Generally, an uptrend in RevPAR indicates a healthy pricing environment due to strong demand which will indirectly generate revenues in other departments as well. But relying on RevPAR figure alone can be mis-leading and detail financial figures in other accounting section should be looked at for overall picture. Additional things to keep in mind:
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RevPAR says nothing about overall hotel revenues – MGM’s per-room revenues of $128 are roughly half the $246 at Wynn Resorts, but with a much larger property portfolio, MGM’s $491 million in total hotel revenues are far greater than Wynn’s $64 million. -
Use other financial data together with RevPAR – Wynn posted the highest RevPAR of the three last quarter, but it also reported the lowest growth rate. And though MGM Mirage generated the smallest RevPAR figure, the firm has now delivered positive growth in that department for thirteen consecutive quarters.
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RevPAR includes hotel revenues only, and doesn’t factor in money raked in elsewhere, such as in the showrooms, restaurants, shops, or casino.
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December 8th, 2006 by financetwitter
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