Occupancy alone isn't the metric to optimise — it's one of three (alongside
ADR and
RevPAR). Pushing occupancy too hard with discounts cannibalises ADR and ends up dropping RevPAR despite the higher fill rate. Pushing ADR too hard drops occupancy and wastes empty rooms. The art is balancing the three.
**What to compare by segment:**
- **Urban transient:** weekday/weekend mix, corporate demand, event compression, and shoulder-season demand.
- **Resort and leisure:** peak-season compression, weather sensitivity, and how far off-season demand drops.
- **Hostel:** dorm/private mix, cancellation behaviour, and event-led demand spikes.
- **Aparthotel / serviced apartments:** length of stay, gap nights, and unit downtime between long bookings.
- **Luxury boutique:** deliberate rate protection, minimum-stay rules, and guest mix.
**Sustained under-performance versus your comp set — three likely causes:**
1. **Pricing too high.** Compare your ADR to your
competitive set (
RGI < 90 = under-performing). Drop rate selectively on slow nights.
2. **Distribution gaps.** Audit channel mix; are you on the OTAs your market uses? Is your booking engine working?
3. **Product gaps.** Old photos, bad recent reviews, poor SEO. Fix the visible product before assuming pricing is the issue.
**Consistently selling out — likely you should test price discipline:**
The economic signal of consistently selling out is that you could raise rates. The trap is hospitality habit: managers fear empty rooms more than under-pricing, so they hold rate too low. Test controlled rate increases on the dates with highest demand and watch occupancy + RevPAR.
**The right way to read occupancy:** Combined with RevPAR (which captures both demand and pricing). A 65% occupancy property with €120 ADR has RevPAR €78. A 90% occupancy property with €70 ADR has RevPAR €63. The first is performing better despite lower occupancy.
