The percentage of available rooms that are sold during a specific time period.
Occupancy rate is a fundamental hotel metric that measures the percentage of available rooms that are occupied or sold. It's one of the simplest yet most important indicators of hotel performance, showing how effectively a property fills its inventory. High occupancy indicates strong demand, while low occupancy may signal pricing issues, seasonal slowdowns, or competitive challenges.
Occupancy directly impacts revenue and operational efficiency. Empty rooms represent lost revenue that can never be recovered - unlike physical products, unsold room nights perish at midnight. However, chasing 100% occupancy at any price can hurt profitability. The goal is to find the optimal balance between occupancy and rate that maximizes total revenue (RevPAR).
Occupancy rate is calculated as a percentage:
Occupancy Rate = (Rooms Sold ÷ Rooms Available) × 100
Example:
If a 100-room hotel sells 75 rooms on a given night: Occupancy Rate = (75 ÷ 100) × 100 = 75% For monthly calculation, sum all room nights sold and divide by total room nights available.
