Increasing the occupancy rate of hotels is undoubtedly one of the biggest concerns for hotel owners. To understand how to calculate room rates in hotels, you need to know various proven strategies for increasing hotel occupancy rates which is a key indicator of the health of your hotel business including RevPAR, ADR, and overall earnings.

How to calculate the hotel occupancy rate?

Simply said, a hotel occupancy rate is the percentage of occupied rooms to total available rooms at a given time. This rate can be calculated based on weekly, monthly, or yearly. It is relatively simple to calculate the occupancy rate of hotels by using the following equations:

Occupancy Rate (%) = Number of Reserved Rooms / Total Number of Rooms

Calculating this at various periods of the year helps hotel owners to decide whether they should adjust their marketing to enhance occupancy rates during downtimes.


What is the Average Daily Rate and how to calculate it?

Average Daily Rate or ADR is one of three principal hotel performance indicators together with hotel occupancy and RevPar. It is the measure of average costs paid for rooms that are sold over a specific time period. It is a direct factor in RevPAR ( revenue per available room) for measuring performance in hotel and market segment areas.

The average daily rate is calculated by the following formula:
ADR= Room Revenue/ Number of Rooms sold

Why are ADR and Hotel Occupancy Rates important?

It is necessary to understand your hotel’s occupancy rate and identify measures to enhance your hotel business. Monitoring it on a regular basis can provide you with a clear picture of your hotel's performance, its current position in the market, and the preference of the customers. If you can determine drops in hotel occupancy and the causes behind them, you will have a good chance of rectifying them using effective revenue management software for hotels.

Wrapping up

If you want to boost your hotel revenue by increasing the occupancy rate, then leverage the advantage of automated revenue management software by PricePoint. It is an advanced AI-generated tool that can provide hotel owners with real-time dynamic pricing strategies to increase ADR and hotel occupancy rates by more than 13%. Furthermore, it analyzes the current market trends and updates room prices to help hoteliers stay ahead of their competitors.

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