The host problem
RevPAR says you had a decent month. But when you add up cleaning
costs, supply restocking, and coordinator fees, the number that actually
landed feels a lot weaker. RevPAR doesn’t account for any of that. Net
RevPAR does.
What turnover drag is
Every booking triggers a turnover: cleaning, laundry, consumable
replacement, and the coordination cost of resetting the unit. These
costs repeat with each checkout — regardless of how long the guest
stayed.
Turnover drag is the per-booked-night penalty that churn creates.
Formula: Turnover Drag per Occupied Night = (Live
Bookings × TCP) ÷ Live Booked Nights
TCP stands for Turnover Cost Proxy — your estimated per-booking cost
to turn the unit. This number stays fixed for the year unless you
recalibrate it. The canonical framework uses $174 per booking as a
working proxy, but you should replace that with your actual cost if you
know it.
What Net RevPAR is
Net RevPAR adjusts raw RevPAR by subtracting turnover drag.
Formula: Net RevPAR = RevPAR − Turnover Drag per
Occupied Night
Net RevPAR approximates your economic performance after accounting
for the friction of guest churn. It penalizes high-volume, short-stay
strategies and rewards longer bookings at similar rates.
Net RevPAR does not replace RevPAR. It sits alongside it as a
diagnostic for whether your booking mix is working economically or just
statistically.
Small example
You had 30 available nights last month. You booked 24 nights across
12 reservations. Accommodation revenue was $3,600.
Raw RevPAR = $3,600 ÷ 30 = $120.
TCP = $150 per booking. Turnover drag per occupied night = (12 ×
$150) ÷ 24 = $1,800 ÷ 24 = $75 per occupied night.
Net RevPAR = $120 − $75 = $45 per available night.
Now change the booking mix. Same 24 booked nights, same $3,600
revenue — but only 6 bookings instead of 12 (ALOS doubles from 2 to 4
nights).
Turnover drag per occupied night = (6 × $150) ÷ 24 = $900 ÷ 24 =
$37.50.
Net RevPAR = $120 − $37.50 = $82.50 per available night.
Same raw RevPAR. Same accommodation revenue. But Net RevPAR nearly
doubles because booking shape improved.
What this diagnostic tells
you
When raw RevPAR and Net RevPAR run close together, turnover drag is
modest relative to your revenue. When they diverge significantly, your
short-stay volume is consuming a large share of the economics you
thought you were capturing.
A high churn strategy — lots of 1–2 night bookings at moderate rates
— can look healthy on a raw RevPAR basis while quietly destroying your
effective take-home per night. Net RevPAR makes that visible.
The connection to pricing
decisions
Net RevPAR clarifies two decisions that raw RevPAR leaves
ambiguous:
Minimum stay settings: If raising your minimum stay
from 1 to 2 nights reduces booking count by 20% but doubles ALOS,
turnover drag likely falls enough to improve Net RevPAR even if raw
RevPAR holds flat.
Thursday/Sunday pricing: Using shoulder nights to
pull 3-night stays instead of 2-night stays improves ALOS without
requiring a rate increase. Net RevPAR rises. That is a pricing lever,
not just a scheduling preference.
What to do this week
- Estimate your per-booking turnover cost: cleaning fee paid to your
cleaner plus supplies. Use that as your TCP. - Multiply TCP by your booking count from last month.
- Divide by your booked nights. That’s your turnover drag per occupied
night. - Subtract that from your RevPAR. That’s your Net RevPAR.
- Note whether the gap between RevPAR and Net RevPAR is large enough
to act on.