Break-Even Occupancy Calculator
The occupancy you need before the hotel makes a penny.
Break-even occupancy
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Rooms to sell per night
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Contribution per occupied room
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Break-even RevPAR
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Updates as you type. Nothing is sent anywhere — the maths runs in your browser.
Formula
Break-even occupancy = Fixed costs ÷ ((ADR − Variable cost per room) × Rooms × Days)
Contribution per room = ADR − Variable cost per occupied room
How to read it
Fixed costs run whether the hotel is full or empty. Break-even occupancy is the point at which room profit finally covers them — the single most useful number an owner can know, and one that changes the moment rate moves.
- Variable cost per occupied room is housekeeping labour, amenities, laundry, utilities and commission on that booking — typically 20-30% of ADR in full service, less in select service.
- Fixed costs include payroll you keep regardless, rent or debt service, insurance, and management and franchise base fees.
- A break-even occupancy above about 70% means the model is fragile: a soft quarter takes you straight into losses.
Terms used here
Frequently asked
+What is a healthy break-even occupancy for a hotel?
Most well-capitalised hotels sit between 45% and 60%. Above 70% the business has little room for a weak season, and usually points to either fixed costs that are too high or a rate that is too low for the cost base.
+Does raising rate lower break-even occupancy?
Yes, and sharply. Break-even depends on contribution per room, which is rate minus variable cost. If variable cost is £38 and rate rises from £180 to £200, contribution goes from £142 to £162 — around 12% fewer rooms needed to cover the same fixed costs.
+Should commission count as a variable cost?
Yes. It is only incurred when the room sells, which is the definition of variable. Leaving it out understates break-even, often by several percentage points in OTA-heavy hotels.