Question 1

What is a good occupancy rate for a hotel?

Accepted Answer

A 'good' occupancy rate varies widely by market, season, and hotel type. While higher is generally better, a rate between 70% and 90% is often considered strong. It's more important to track your rate against your competitors (compset) and your own historical data.

Question 2

How do I calculate the occupancy rate for a month?

Accepted Answer

To calculate it for a longer period like a month, you would sum the total number of rooms sold for all days in the month and divide it by the total number of available rooms for all days in the month (Total Rooms x Number of Days).

Question 3

Does occupancy rate account for price?

Accepted Answer

No, occupancy rate only measures how full your hotel is, not the price at which the rooms were sold. That's why it's crucial to analyze it alongside ADR (Average Daily Rate) and RevPAR (Revenue Per Available Room) to get a full picture of your hotel's performance.

Question 4

What are 'out of order' rooms?

Accepted Answer

Out of order (OOO) rooms are those that are not available for sale for reasons like maintenance or renovation. When calculating your 'Total Available Rooms', you should subtract any OOO rooms from your hotel's total room count to get an accurate occupancy rate.

Question 5

Can an occupancy rate be too high?

Accepted Answer

Yes. Consistently being at or near 100% occupancy might mean your room rates are too low and you're missing out on potential revenue. It can also lead to staff burnout and wear and tear on the property. The goal is to maximize revenue, not just occupancy.

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Understanding Occupancy Rate

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