Rate Drop Calculator
How much extra occupancy a discount has to buy before it is worth doing.
Occupancy needed to hold revenue
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Occupancy needed to hold profit
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Extra rooms per night to hold profit
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New rate after the drop
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Updates as you type. Nothing is sent anywhere — the maths runs in your browser.
Formula
Occupancy needed = Current revenue ÷ (Discounted rate × Rooms)
For profit: Occupancy needed = Current contribution ÷ ((Discounted rate − Variable cost) × Rooms)
How to read it
Dropping rate to fill rooms feels productive and often is not. Because a discount applies to every room you were already going to sell, the extra occupancy needed to stand still is usually far higher than people expect. This works out that threshold, and what happens to profit rather than just revenue.
- The profit threshold is always higher than the revenue threshold, because every extra room carries a servicing cost. Revenue-only maths flatters a discount.
- A 10% cut typically needs around 11% more occupancy to hold revenue — and considerably more to hold profit.
- Discounts are visible to your comp set and to rate-shopping guests. The cost of a cut usually outlives the period you cut it for.
Terms used here
Frequently asked
+How much occupancy do I need to cover a 10% rate cut?
Roughly 11% more occupancy to hold revenue flat — a 68% occupancy would need about 76%. To hold profit flat you need more still, because each extra room costs money to service. In most full-service hotels that pushes the requirement past 80%.
+Is discounting ever the right call?
Yes, when demand is genuinely elastic and the alternative is empty rooms with no other revenue — a soft shoulder period with no group business, for instance. It is rarely right in compressed periods, where the same rooms would have sold anyway.
+Why does profit need more occupancy than revenue?
A discount reduces the money from every room while each additional room adds servicing cost — housekeeping, amenities, utilities, commission. So the gap you have to fill is bigger measured in profit than measured in revenue.