In the hotel industry, occupancy percentage specifically refers to the percentage of hotel rooms that are currently occupied by guests compared to the total number of rooms available in the hotel.
Occupancy percentage formula
So the formula for occupancy percentage is
Occupancy Percentage = Number of rooms occupied / Number of rooms available
Other Formulae for occupancy related
Multiple Occupancy %
The term multiple occupancy means, no. of rooms sold with 2 or more than 2 guest in a room. Hence multiple occupancy can be double occupancy / triple occupancy or more
Multiple Occupancy = Number of rooms occupied by more than one guest / Percentage Number of rooms occupied
Double Occupancy %
Double occupancy % = no. of rooms sold with 2 people occupying each room is called double occupancy.
1) Double Occupancy % =
- (House Count – No. of rooms sold) x 100
- (House Count – 1) x 100
Foreign Occupancy %
- Foreign occupancy = Total no. of guest – local no. of guest.
- Foreign occupancy % = No. of foreign guest / House-count x 100
Local Occupancy %
- Local occupancy % = 100 – Foreign occupancy %
A hotel has 100 rooms with the following configuration;
Single room 25 @ Rs. 4,000
Double room 20 @ Rs. 5,000
Twin room 50 @ Rs. 6,000
Suites 5 @ Rs. 10,000
On 25th April
20 single, 10 double, 30 twin, 2 suites they were occupied. And
Foreigners staying in house = 20
Then calculate the
- Occupancy percentage
- Local occupancy percentage
- Double occupancy percentage
- Foreign occupancy percentage
For this we need to calculate first House-count
House count = total no. of guests in the hotel
=no. of single guest rooms + 2 (no. of double guest) + 2 (no. of twin guest rooms) + 2 (no. of sites sold)
20 + 2 (10) + 2 (30) +2 (2)
20 + 20 + 60 + 4
If you want to more related about House-count then read the post House count in Hotel : Definition, Formula & Calculation I cover all of these in this post about the House-count.
Occupancy percentage =( no. of rooms sold / no. of rooms available) x 100
( 62 /100) x 100
Local occupancy % = (local no. of guest / No. of total guest) x 100
=((house count – foreign guest) / Total no. of guest ) x 100
( 104-20/62) x 100
Double occupancy % = (house count – no. of rooms sold)/ No. of rooms sold x 100
(104-62) / 62 x 100
(42 / 62) x 100
Foreign occupancy % = (no. of foreign guest / Total no. of guest ) x 100
(20/104) x 100
Importance of Occupancy percentage in hotel
Following are the Importance of the Housekeeping percentage in hotel
Revenue generation – The occupancy percentage is closely linked to a hotel’s revenue as it indicates how many rooms are being sold. A higher occupancy percentage means that more rooms are being sold, which leads to increased revenue.
Operational efficiency – high occupancy percentage indicates that the hotel is efficiently managing its room inventory, which can lead to cost savings and increased productivity.
Forecasting – The occupancy percentage can also be used to forecast demand and adjust room rates accordingly. For example, during high demand periods, a hotel may increase its room rates to maximize revenue.
Competitiveness – It can also be used to compare a hotel’s performance to its competitors. A hotel with a higher occupancy percentage is more competitive as it indicates that it is more popular among guests.
Investment opportunities – A hotel’s occupancy percentage can be used to evaluate investment opportunities. A hotel with a high occupancy percentage may be a good investment as it indicates that there is strong demand for its rooms.
The occupancy percentage is a key performance indicator for hotels as it measures the percentage of available rooms that are occupied by guests. It is calculated by dividing the number of rooms sold by the number of rooms available for sale in a given period of time and it is an important metric for hotels as it measures their performance in terms of revenue generation, operational efficiency, forecasting, competitiveness, and investment opportunities.