What is a good hotel occupancy rate?

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. **Benchmarks by segment (annual average, 2026):** - **Urban transient (business + leisure mix):** 65-80% annual; 85-95% in peak weeks; 50-65% in shoulder. - **Resort and leisure:** 60-75% annual; 90-100% in peak season; 30-50% off-season. - **Hostel:** 70-85% annual (younger demographic, more flexible travel patterns). - **Aparthotel / serviced apartments:** 75-85% annual (longer stays smooth occupancy). - **Luxury boutique:** 55-75% annual (often deliberately constrained to maintain rate). **Below 50% sustained — 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. **Above 95% sustained — likely you're under-pricing:** 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 rate increases of 5-10% 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.