Increasing Hotel Occupancy and Revenue
- Integrate web booking engine, get more direct bookings.
- Leverage the power of OTAs & metasearch engines, increase your online presence.
- Manage online reputation of your hotel.
- Adopt dynamic pricing strategy, grow revenue.
- Most importantly, invest heavily in guest service.
The average cost of a hotel room in the U.S., including taxes and fees, rose from $177.36 in 2016 to $180.12 in 2017. Perennial gateway cities topped the chart. New York's average daily rate was $392.95, followed by San Francisco at $387.20, Boston at $344.49 and Washington, D.C., at $325.30.
According to IbisWorld, there are 74,372 hotels, and the hotel industry generated $166.5 billion in revenue in the United States alone last year. This represents an annual growth rate of 4.7% over the past 5 years. Industry profits were $26.0 billion, and wages paid to hotel employees totaled $42.7 billion.
We've put together a list of 9 simple and easy-to-implement steps that can help you increase hotel room occupancy.
- Target the right market.
- Customize packages and promotions.
- Count on events or cultural festivals.
- Discounts, loyalty programs and other perks.
- Create a buzz around your locality, not just your property.
The profit, or the money you get to take home, is the money that's made after all the business expenses are paid off. While the industry is pretty tight-lipped about it, it's estimated that the average profit turned by a hotel chain owner is between $40,000 and $60,000 per year (source). Womp womp.
Conversely, if a hotel is located on the beach, it will be busier during the summer. Many other factors can affect your occupancy rate, including room rates, the guest experience, your online reputation, room cleanliness and the quality and availability of your facilities.
It's quite easy to calculate RevPAR. Simply multiply your average daily rate (ADR) by your occupancy rate. The other way to calculate it is by dividing the total number of rooms available in your hotel with the total revenue from the night. In a 300 room hotel, 70% occupancy equals 210 rooms occupied.
According to Cushman & Wakefield, the average cost of building a hotel ranges from $115,000 to $1.5 million per room. That takes hotels at every level from midscale to luxury, including boutique hotel projects.
How to Determine Occupancy Rate
- Determine the area to be occupied in square feet (Length X Width) Ex: 30Lx50W=1500 sq ft.
- Choose appropriate occupancy requirement:
- Divide the area by the occupancy requirement for total occupant load.
- To get 25% occupancy, divide by 4.
How to Calculate Maximum Occupancy Load. The occupancy load is calculated by dividing the area of a room by its prescribed unit of area per person. Units of area per person for specific buildings can be found in the chart at the end of this article.
To most accurately calculate average labour expense per occupied room, take the total labour plus benefits expense for a time period and divide it by the number of rooms serviced. Cleaning supplies and amenities – Determine the average cost to replace “consumable” amenity items such as soap and shampoo.
Also called Double Occupancy Ratio is mainly used to forecast Food & Beverage revenue, to indicate clean linen requirements, and to analyze Average Daily Room Rate. which is calculated by dividing the number of rooms occupied by more than one guest divided by the number of rooms sold multiplied up by 100.
Occupancy Index – The measure of your property occupancy percentage compared to the occupancy percentage of your competitive set.
Occupancy is calculated by dividing the number of rooms sold by rooms available. Occupancy = Rooms Sold / Rooms Available. Occupancy Index– The measure of your property occupancy percentage compared to the occupancy percentage of your competitive set. Formula: Hotel OCC/ competitive set OCC * 100.
Call center occupancy is one of the key metrics that is often confused with an agent's productivity. Essentially, It is the percentage of time that an agent actually spend handling incoming calls against the available or idle time, which is determined by dividing workload hours by staff hours.
- Bed occupancy rate (BOR): The occupancy rate is a measure of utilization of the available bed capacity. It indicates the percentage of beds occupied by patients in a defined period of time, usually a year. It is computed using the following formula: BOR= Inpatient days / Bed days ×100 (2)
Why is Occupancy Rate important for hotels? Analysts use occupancy rates when discussing senior housing, hospitals, bed-and-breakfasts, hotels and rental units, among other categories. In a call center, occupancy rate refers to the amount of time agents spend on calls compared to their total working hours.
Revenue per available room (RevPAR) is a metric used in the hospitality industry to measure hotel performance. The measurement is calculated by multiplying a hotel's average daily room rate (ADR) by its occupancy rate.
The most obvious call center occupancy formula would be to divide the time an agent spends on calls by all of their available working time. For instance, if an agent spent 54 minutes on calls during one hour (aka 60 minutes) of work, they would have an occupancy rate of 90 percent (54/60 = 90%).
The average daily rate (ADR) measures the average rental revenue earned for an occupied room per day. The operating performance of a hotel or other lodging business can be determined by using the ADR.
OCC - Occupied: A guest is currently occupied in the room. Stayover: The guest is not expected to check out today and will remain at least one more night. On-Change: The guest has departed, but the room has not yet been cleaned and ready for sale.
Occupancy Percentage is the most commonly used operating ratio in the hotel front office, The Occupancy percentage indicates the proportion of rooms either sold or occupied to the number of rooms available for the selected date or period.
Occupancy rate is the ratio of rented or used space to the total amount of available space. Analysts use occupancy rates when discussing senior housing, hospitals, bed-and-breakfasts, hotels, and rental units, among other categories.
Occupancy Count = total number of occupants assigned to an area, as calculated by Update Area Totals. Capacity = total number of seats defined in an area, as stored in the Employee Capacity field of the Rooms table.
