Does the market care about RevPAR? A case study of five large U.S. lodging chains

During the past several decades, the lodging industry has used RevPAR (revenue per available room) as a key indicator to evaluate a firm's performance and to make investment decisions. However, a limited number of research articles empirically examined whether or not RevPAR, in fact, is a valid measure for a lodging firm's performance, especially when compared with other traditional performance measures. The purpose of the current discussion, therefore, is to compare the explanatory power of RevPAR with three traditional financial measures-earnings per share (EPS), return on assets (ROA), and return on equity (ROE)-for lodging firms' performance, estimated by total shareholders' returns.