September 24, 2025
Hotel occupancy rate is one of the most important KPIs in hospitality. Discover how to calculate it, what counts as a good rate, and seven smart ways to increase occupancy without sacrificing profits.
One of the most critical hotel revenue management formulas used daily is the hotel occupancy rate. It’s a simple but powerful metric that shows how efficiently you’re filling rooms—and when combined with other KPIs, it becomes a cornerstone of revenue management.
The hotel occupancy rate is the percentage of available rooms that are sold during a given period. It’s one of the most widely tracked hospitality KPIs and answers a straightforward question: how full is your hotel?
Hoteliers often use occupancy alongside other metrics like:
This combined approach helps measure both volume (rooms sold) and value (how much revenue each room generates).
The formula is simple:
Hotel Occupancy Rate = (Number of Occupied Rooms ÷ Total Available Rooms) × 100
If your property has 100 rooms and 75 are booked tonight, your occupancy rate is 75%.
A “good” occupancy rate isn’t always the highest possible number. While 100% occupancy looks impressive, it doesn’t necessarily mean maximum revenue:
The key takeaway: a good occupancy rate is the one that delivers the highest revenue and profit margins, not just the fullest hotel.
Here are seven practical strategies to boost occupancy while keeping profitability in check:
Occupancy is just one piece of the revenue management puzzle. Other essential metrics include:
Learn more in our guide to hotel revenue management formulas.
Pricepoint helps independent hotels and hostels maximize revenues with an AI-powered revenue management system. By automating dynamic pricing, Pricepoint optimizes room rates 24/7, increasing occupancy by up to 13% and revenue by an average of 19%.
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