Occupancy Rate

Occupancy Rate is the percentage of a hotel's available rooms that are sold over a given period. It is one of the foundational KPIs in hospitality and a direct input into RevPAR.

Formula

Occupancy Rate = (Rooms Sold / Rooms Available) × 100

Rooms available is usually the property's total inventory minus any out-of-order rooms.

Example

A 150-room hotel sells 120 rooms on a given night. Occupancy = 120 / 150 = 80%.

Why it matters

Occupancy is the volume side of the rate/volume equation. Combined with ADR, it determines RevPAR. Managers watch occupancy to gauge demand, set length-of-stay restrictions, and decide when to open or close discounted rate plans on OTAs.

Related metrics

• ADR — the rate side of the equation
• RevPAR — rate × occupancy
• MPI (Market Penetration Index) — occupancy relative to a comp set