Occupancy Rate Calculator
Calculate the percentage of occupied space or rooms for hotels, rentals, and commercial real estate.
What is Occupancy Rate?
Occupancy rate is a key performance indicator (KPI) used primarily in the hospitality and real estate industries. It measures the percentage of available units or rooms that are currently filled by tenants or guests over a specific period. This metric is vital for assessing the health and financial viability of a property.
The Occupancy Rate Formula
Calculating the occupancy rate is straightforward. Use the following mathematical formula:
Example Calculation
If you own a boutique hotel with 50 rooms and on a Tuesday night 38 of those rooms are booked, your calculation would look like this:
- Occupied Units: 38
- Total Units: 50
- Calculation: (38 ÷ 50) = 0.76
- Occupancy Rate: 0.76 × 100 = 76%
Why Monitoring Occupancy Matters
Tracking your occupancy rate helps in several strategic areas:
- Revenue Management: If occupancy is consistently high (above 95%), it may be time to increase your rental prices or room rates.
- Operational Planning: Knowing peak occupancy periods allows for better staffing and maintenance scheduling.
- Investor Relations: For commercial real estate, a high occupancy rate is a sign of a stable, low-risk investment.
- Marketing Effectiveness: Low occupancy rates might indicate that your marketing efforts need adjustment or that your pricing is too high for the current market.
What is a "Good" Occupancy Rate?
A "good" rate depends entirely on the industry. For hotels, an average occupancy rate of 65% to 75% is often considered healthy. For residential apartments, landlords typically aim for 90% or higher to ensure the property covers its overhead and generates profit.