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Hotel Break-Even Occupancy Calculator

Enter your monthly fixed costs, number of rooms and ADR to find the break-even occupancy.

How it is calculated

The tool compares your monthly fixed costs with the most revenue the hotel could earn in a month if every room sold every night. That potential revenue is rooms × ADR × 30, using a flat 30-day month. Break-even occupancy is fixed costs ÷ potential revenue × 100. The rooms figure is rooms × occupancy ÷ 100, rounded up to a whole room: the average number of rooms that must be sold each night. The last line repeats the fixed costs you entered, shown with a dollar sign whatever currency you actually use, as the revenue to cover. All three inputs must be above zero. ADR is the average rate paid per occupied room per night. Only fixed costs are used, so variable costs per occupied room (cleaning, laundry, commissions) are not subtracted, and the result can be above 100%, which means the costs cannot be covered at that rate.

Worked example

Monthly fixed costs 81,000, 50 rooms and an ADR of 120. Potential monthly revenue: 50 × 120 × 30 = 180,000. Break-even occupancy: 81,000 ÷ 180,000 × 100 = 45.00%. Rooms to sell each night: 50 × 45% = 22.5, rounded up to 23 rooms. So on average 23 of the 50 rooms must be sold every night for room revenue to just cover the 81,000. Check: 22.5 rooms × 120 × 30 nights = 81,000.

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Common mistakes

  • Entering yearly fixed costs. The tool uses a 30-day month, so the fixed costs must be monthly.
  • Using the room rate on the booking site (rack rate) instead of the real average daily rate after discounts and commissions, which makes break-even look lower than it is.
  • Putting variable costs per occupied room into fixed costs, or leaving them out and then assuming break-even covers all costs; the tool only knows what you enter as fixed.
  • Reading a result above 100% as an error. It means the hotel cannot cover its fixed costs even when full at that ADR; raise the rate or cut costs.
  • Dividing by the number of days in a real month. The tool always uses 30, so for a 31-day month the true figure is slightly lower.

About this calculator

A hotel's break-even occupancy is the percentage of rooms that must be filled, on average, for room revenue to just cover fixed monthly costs — rent or mortgage, staff salaries, insurance, and other expenses that don't change with how many rooms are sold. Below that occupancy level the property runs at a loss regardless of how well individual rooms are priced; above it, each additional booking contributes toward profit.

This calculator derives that threshold from monthly fixed costs, total room count, and average daily rate (ADR) — a standard hospitality-industry metric for the average revenue earned per occupied room per night. It's a core planning number for hotel general managers, revenue managers, and owners setting pricing strategy, evaluating whether a discount promotion still leaves the property profitable, or forecasting how a slow season will affect the bottom line.

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Comments (1)

  • Editorial team

    A rate cut raises the bar faster than it feels. With 180,000 of monthly fixed costs and 120 rooms, an ADR of 95 breaks even at 52.63 percent, about 64 rooms a night, while an ADR of 85 needs 58.82 percent, about 71 rooms. So a ten-unit discount must bring roughly 7 extra rooms a night just to stand still. The figure covers room revenue only. What promotion are you thinking of testing?

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