Break-even Occupancy Calculator
Break-even occupancy calculator that turns fixed costs, variable cost per room and ADR into the occupancy rate and room nights you must sell. Free, no sign-up, runs in your browser.
Cost Inputs
Break-even Results
Break-even Occupancy
24.7%
Required Room Nights
296
Room Nights per Day
9.9
ADR Used
$180
What is break-even occupancy?
Break-even occupancy is the occupancy rate at which a hotel's room revenue, after variable costs, exactly covers its fixed costs for a period. It measures how many of your available room nights must sell at your current ADR before the property stops losing money. For an owner or manager it turns a budget into one target number you can compare against your forecast and pace reports.
Formula
Break-even occupancy % = Fixed costs ÷ ((ADR − Variable cost per occupied room) × Rooms × Days) × 100
ADR minus variable cost is the contribution each sold room night makes toward fixed costs. Dividing fixed costs by that contribution gives the room nights you must sell; dividing by total available room nights (rooms × days) turns it into an occupancy rate.
Worked example: 40-room hotel, 30-day month
- Fixed costs for the month (salaries, rent or mortgage, insurance, base utilities) are $45,000.
- Each occupied room costs $28 in variable cost (cleaning labour, linen, amenities, card fees), and ADR is $180, so contribution is $180 − $28 = $152 per room night.
- Required room nights: $45,000 ÷ $152 = 296.1, shown as 296.
- Available room nights: 40 rooms × 30 days = 1,200.
- Break-even occupancy: 296.1 ÷ 1,200 = 24.7%, or about 9.9 rooms sold per night.
Every room sold beyond roughly 10 a night contributes $152 to profit; every night below that adds to the month's loss.
How to read your break-even result
- Compare break-even with forecast occupancy, not last year's average. The gap between them is your safety margin; a thin gap means one slow week can push the month into a loss.
- A result above 100% means the property cannot break even at this ADR and cost base, however full it gets. Work on rate, fixed costs, or revenue outside rooms before chasing volume.
- Lowering ADR to fill rooms raises break-even, because each sale contributes less. Re-run the calculator with the discounted rate before launching a promotion.
- Use sellable inventory for Rooms. If rooms are out of order or blocked, reduce the count so the target reflects rooms you can actually sell.
- Be honest about what is variable. Only costs that rise with each occupied room belong in variable cost; salaried staff and fixed contracts go in fixed costs.
Frequently asked questions
What costs count as fixed vs variable in a hotel?
Fixed costs are paid whether rooms sell or not: salaried staff, rent or loan payments, insurance, property tax, software subscriptions and base utilities. Variable costs scale with occupied rooms: housekeeping labour paid per room, laundry, guest amenities, breakfast if included, and OTA or card commissions.
Should OTA commission be part of the variable cost?
Yes, if a meaningful share of bookings come through OTAs. Add the average commission per room night (commission % × ADR × share of OTA bookings) to variable cost so break-even reflects what you actually keep.
Does this include food, beverage or other revenue?
No. The calculator covers rooms only. If other departments contribute profit, you can subtract that contribution from fixed costs before entering them to see the lower rooms break-even.
How often should I recalculate break-even occupancy?
Recalculate when budgets change, when ADR shifts with the season, or when a large fixed cost such as a new lease or salary is added. Running it monthly alongside your forecast keeps the target current.