Occupancy Metrics in Hospitality - Flashcard set - Hospitality Finance

Still learning

Occupancy Rate

The occupancy rate is the ratio of rented or used spaces to the total number of available spaces. Calculation:

Occupancy\ Rate = \frac{Total\ Occupied\ Rooms}{Total\ Available\ Rooms} \times 100

Average Daily Rate (ADR)

Average Daily Rate (ADR) is a financial metric that calculates the average price or rate for each sold room in a specific time period. Calculation:

ADR = \frac{Total\ Room\ Revenue}{Number\ of\ Rooms\ Sold}

Revenue Per Available Room (RevPAR)

Revenue Per Available Room (RevPAR) is a metric used to assess a hotel's ability to fill its rooms at an average rate. Calculation:

RevPAR = ADR \times Occupancy\ Rate

or alternatively,

RevPAR = \frac{Total\ Room\ Revenue}{Total\ Available\ Rooms}

Double Occupancy Rate

The double occupancy rate is the percentage of rooms that are occupied by two guests as opposed to a single guest. Calculation:

Double\ Occupancy\ Rate = \frac{Number\ of\ Rooms\ with\ Two\ Guests}{Total\ Occupied\ Rooms} \times 100

Length of Stay (LOS)

Length of Stay (LOS) indicates the average number of nights that guests stay at the hotel. Calculation:

LOS = \frac{Total\ Number\ of\ Guest\ Nights}{Total\ Number\ of\ Bookings}

No-show Rate

The no-show rate is the percentage of guests who do not arrive for their booked reservations. Calculation:

No-show\ Rate = \frac{Number\ of\ No-shows}{Total\ Number\ of\ Bookings} \times 100

Sold-out Nights

Sold-out nights refer to the number of nights where all available rooms were booked. Calculation: Simply count the number of nights with 100% occupancy rate for a given period.

Occupancy Percentile

Occupancy Percentile ranks the hotel's occupancy rate against a benchmark or past data to gauge performance. Calculation: Determine where the current occupancy falls within a historical distribution of occupancy rates.

Overstay Rate

The overstay rate is the percentage of guests who choose to extend their stay beyond their original booking. Calculation:

Overstay\ Rate = \frac{Number\ of\ Overstays}{Total\ Number\ of\ Departures} \times 100

Understay Rate

The understay rate is the percentage of guests who check out before their scheduled departure date. Calculation:

Understay\ Rate = \frac{Number\ of\ Understays}{Total\ Number\ of\ Expected\ Departures} \times 100

Group Occupancy Rate

The group occupancy rate is the percentage of rooms occupied specifically by group reservations. Calculation:

Group\ Occupancy\ Rate = \frac{Total\ Number\ of\ Group\ Rooms\ Occupied}{Total\ Number\ of\ Rooms\ Sold} \times 100

Complimentary Room Rate

Complimentary Room Rate is the percentage of rooms occupied free of charge, often for promotional or courtesy reasons. Calculation:

Complimentary\ Room\ Rate = \frac{Number\ of\ Complimentary\ Rooms}{Total\ Number\ of\ Occupied\ Rooms} \times 100

Walk-in Rate

The walk-in rate is the percentage of guests who book their stay without a prior reservation. Calculation:

Walk-in\ Rate = \frac{Number\ of\ Walk-ins}{Total\ Number\ of\ Bookings} \times 100

Know

Discover published sets by community