Ask most short-term rental owners how their property is performing and they’ll tell you their occupancy rate. “We’re at 80% occupancy” sounds like success. It might be. Or it might mean your property is booked almost every night at rates so low that you’re barely covering your costs.

Occupancy rate is easy to measure and easy to understand. That’s part of why it gets used as the default measure of STR performance. But it’s only one piece of the picture, and in a market like Las Vegas—where nightly rates can swing dramatically based on events, seasons, and demand—focusing on occupancy at the expense of revenue metrics can actively mislead you.

Here’s how to think about both numbers, what they each tell you, and which combination actually signals that your property is performing well.

What Occupancy Rate Actually Tells You

Occupancy rate is the percentage of available nights that your property is booked over a given period. If your property is available 30 nights in a month and booked for 24 of them, your occupancy rate is 80%.

This number is useful for a few things. It tells you whether your property is generating interest. A persistently low occupancy rate—say, below 50%—is a signal that something is off, whether that’s pricing, listing quality, photos, location, or competition in your market. It tells you how much demand exists for your property on your current terms.

What occupancy rate doesn’t tell you is whether your property is profitable, whether you’re pricing correctly, or whether you’re making the most of your available nights. Two properties with identical 80% occupancy rates might be generating vastly different revenue, and that gap matters.

Revenue Per Available Night: The More Useful Number

Revenue per available night—sometimes called RevPAN in the industry—tells you how much revenue you’re generating for every night your property is available, regardless of whether it’s booked. It’s calculated by dividing your total revenue over a period by the total number of available nights.

If your property earned $6,000 in October across 25 booked nights out of 31 available, your occupancy rate is about 81%. Your RevPAN is $6,000 divided by 31, which is roughly $194 per available night.

Now imagine you booked only 18 nights in October but earned $7,200 because you raised your rates strategically and held out for higher-value bookings. Your occupancy rate drops to 58%, which sounds like a significant decline. But your RevPAN rises to $232—nearly 20% higher than the previous scenario.

Which month did your property perform better? The one with 81% occupancy or the one with 58% occupancy? By the only measure that actually matters—revenue—the lower-occupancy month won.

This is the trap of optimizing for occupancy. You can always fill your calendar by dropping your rates low enough. That doesn’t mean you should.

Average Daily Rate: Understanding Your Pricing Performance

Average daily rate (ADR) is your total revenue divided by the number of nights booked. It tells you what you’re actually earning per booked night, which helps you understand whether your pricing is calibrated to the market.

In the Las Vegas STR market, ADR is highly variable depending on property type, location, and season. A 2-bedroom condo close to the Strip might average $200 per night across a year. A 5-bedroom house with a pool and game room in North Las Vegas might average $600 per night. Both could be performing well or poorly depending on what comparable properties in each category are earning.

Tracking your ADR month-over-month and comparing it to your competitive set gives you a clear read on whether your pricing is capturing the market rate or leaving money behind. If your ADR is consistently 20% below comparable properties in your area, you’re likely under-priced. If your ADR is significantly above comparable properties but your occupancy rate is low, you’re likely pricing yourself out of the bookings you need.

The Las Vegas Dimension: Events Change Everything

In most STR markets, RevPAN trends are relatively predictable because demand follows consistent seasonal patterns. Las Vegas is different. Here, demand can spike suddenly and dramatically based on event announcements, convention calendar changes, and the performance of recurring events like Formula 1 or the NFR.

This variability makes tracking revenue metrics on a month-to-month basis especially important. Your October 2024 performance doesn’t automatically predict your October 2025 performance if Formula 1 happens to fall on a different set of dates or if a new major event has been added to the calendar.

What it does do is give you a baseline. If you know your October RevPAN was $194 last year, you have a starting point for evaluating whether $210 this October represents improvement or whether an event-heavy calendar should have pushed you much higher.

Looking at your revenue data around specific events—what was your average nightly rate during Formula 1 week? What was your occupancy rate during the NFR?—helps you understand how your property responds to specific demand drivers. Over time, this event-level data becomes a planning tool for the following year.

Net Revenue Is the Number That Actually Counts

RevPAN and ADR are more useful than occupancy rate, but they’re still gross metrics. The number that really tells you whether your property is profitable is net revenue—what’s left after you subtract all costs.

The costs that eat into STR revenue include platform fees (Airbnb charges hosts a service fee, typically 3% on host-only fee structure), cleaning fees and cleaning costs, property management fees if you’re using a manager, maintenance and repairs, supplies and consumables, utilities, insurance, property taxes, mortgage payments, and HOA fees where applicable.

A property grossing $8,000 per month with $4,000 in costs has a very different financial profile than one grossing $6,000 with $1,500 in costs. Gross revenue looks better in the first case. Net revenue is better in the second.

Tracking your costs alongside your revenue—even if it requires a simple spreadsheet rather than sophisticated software—is the only way to know whether your STR is actually generating the return you expect.

What Good STR Performance Looks Like in Las Vegas

There’s no universal benchmark that applies to every Las Vegas vacation rental, because property type, location, size, amenities, and management quality all affect what’s achievable. That said, a few general principles hold:

A property with strong occupancy (65-80%) and a competitive ADR is generally performing well. If your occupancy is consistently above 85%, you may actually be under-pricing—you’re leaving money on the table because your property is too easy to book. Building in some open nights by raising rates often produces higher total revenue even as occupancy dips.

Seasonal RevPAN swings of 30-50% between your slow months and your peak months are normal in Las Vegas. What matters is how your peak months compare to comparable properties in your market. If your RevPAN during Formula 1 week is significantly below the market average for similar properties, your pricing strategy needs attention.

Year-over-year RevPAN growth—adjusting for any major changes to the event calendar—is the most honest indicator of whether your property’s performance is improving over time.

How to Use These Numbers to Make Better Decisions

Understanding these metrics isn’t just about reporting. It’s about making better decisions.

When you’re deciding whether to lower your rates during a slow stretch to boost occupancy, RevPAN tells you whether that trade-off is worth it. When you’re evaluating whether a property improvement—adding a pool, upgrading the kitchen, adding a hot tub—is worth the investment, tracking your ADR before and after gives you real data on whether the upgrade changed what guests are willing to pay.

When you’re considering whether to bring on a property manager, comparing your current net revenue to what a managed property in your category typically generates gives you a real basis for that decision rather than a gut feeling.

At 5 Star STR, every property we manage gets a monthly business review that includes an income report, performance data, and a forward-looking forecast. Property owners aren’t left guessing how their property is performing—they have real numbers to work with every month.

If you’d like to understand what your property’s performance looks like in context of the Las Vegas market, we’re happy to put together a custom income projection. Click here to book your appointment with 5 Star STR today.