If you have the opportunity to directly or indirectly manage a catering facility, then the occupancy rate is something you should be interested in. So below we talk about what the occupancy rate is and how it is calculated.
What is the occupancy rate?
When you need to express in percentages how much your object is occupied in a certain period of time, then it is expressed through the occupancy rate. Logically speaking, the higher the percentage of occupancy, the better for the facility itself. High occupancy reflects a large number of reservations. However, this does not always mean that high occupancy is a good thing for the facility.
Why high occupancy is not always good for an accommodation facility?
When we say that the high occupancy rate in hotel is not always good, that means there are situations when it is and situations when it is not. This is measured in combination with other earnings indicators, the so-called KPIs. (Key Performance Indicator). So there are cases when the facility is 80% occupied but the earnings are higher than when it is 100% because that 80% earns more money. Although facility occupancy is one of the success measurement factors, the focus should not be on occupancy but on maximizing revenue.
Because of that experienced revenue managers they say that any occupancy over 95% is bad because it indicates that you have sold your accommodation cheaply and that your ADR increase potential is greater than what was sold.
How to calculate occupancy rate?
KPI of the occupancy rate can be calculated using the following formula:
Occupancy rate = number of occupied rooms / total number of available rooms
Primer: If your hotel has 100 rooms and 90 rooms are occupied: 90 / 100 = 0.9 = 90 percent occupancy.
How can BHC help you increase your earnings with your current occupancy rate?
Many years of experience have helped us to develop a system to use the average daily rate and revenue per available room to increase revenue with increasing occupancy rates. In this, we are helped by software that was created for this purpose.
Feel free to contact us by phone and help your facility to have an occupancy rate that is reciprocal to the maximized daily income.
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