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Month end · Free calculator · Nothing leaves your computer

What occupancy do we need to break even?

Rooms, food and beverage, and the whole hotel. Change any figure and the answer updates.

Split a semi-variable cost

Take the same cost in a busy month and a quiet month; this splits it into a cost per room and a fixed part.

Busy month costBusy month roomsQuiet month costQuiet month rooms

Per room = ($62,000 − $48,000) ÷ (3,000 − 2,000) = $14.00 · Fixed = $62,000 − 3,000 × $14.00 = $20,000

Your figures

Rooms in the hotelTotal rooms availableDays in the monthThe period you are looking atAverage rateWhat a room sells for, before commissionOccupancy %How full you expect to beCommission %OTA or agent commission on the rateCost per occupied roomCleaning, amenities, laundryFixed costs a monthRooms-department costs that don't move with occupancy

Each room adds
$146.80
Break-even occupancy
18.0% · 647 room nights
Profit at 70%
$274,936
Lowest rate at that occupancy
$86.02

The working

Each room adds = $210.00 × (1 − 12%) − $38.00 = $146.80
Break-even = $95,000 ÷ $146.80 = 647.1 room nights
Occupancy = 647.1 ÷ (120 rooms × 30 days) = 18.0%
Profit at 70% = 2,520 room nights × $146.80 − $95,000 = $274,936
Lowest rate at 70% = ($95,000 ÷ 2,520 + $38.00) ÷ (1 − 12%) = $86.02