Revenue per Available Square Metre (RevPASM) measures the revenue generated relative to the available square metres of a defined space during a specified period.
In hospitality, this metric can be useful for evaluating the revenue performance of meeting rooms, banquet halls, conference facilities, and other revenue-generating spaces.
The metric is not universally standardized, so hotels should define which revenue sources, spaces, and time periods are included in the calculation.
How It Works
RevPASM is calculated by dividing the revenue generated by a defined space by the available area of that space.
Formula:
RevPASM = Revenue Generated ÷ Available Square Metres
Depending on the hotel’s reporting methodology, the calculation may cover a particular event, a day, a month, or another defined period.
For spaces used for multiple events, hotels should apply a consistent method when comparing performance.
Practical Example
A hotel generates CAD 6,000 in meeting-room revenue during a reporting period. The meeting space has an available area of 200 square metres.
RevPASM = CAD 6,000 ÷ 200
RevPASM = CAD 30 per square metre
This means the space generated CAD 30 in revenue per available square metre during the specified period.
The figure is illustrative and does not represent profit or account for operating costs.
How to Interpret It
RevPASM can help hotels compare the revenue performance of different event spaces and evaluate how effectively they monetize their available area.
A higher RevPASM may reflect stronger pricing, better utilization, or demand for a particular space. However, comparisons should account for differences in location, capacity, event type, setup requirements, and operating costs.
Hotels should also distinguish between revenue per available square metre and revenue per occupied or rented square metre. The former measures performance against the space available, while the latter measures revenue relative to the space actually used.
Related Terms
- Total Revenue: Revenue generated by the hotel’s various revenue-producing activities.
- Ancillary Revenue: Revenue generated from services beyond the core room sale.
- Revenue Optimization: Improving revenue performance through pricing, inventory, distribution, and other commercial decisions.
- Contribution Margin: Revenue remaining after deducting the relevant variable costs.
- Revenue Management Strategy: The hotel’s overall approach to optimizing revenue.