Occupancy Rate
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In short
Occupancy rate is the percentage of available rooms that were actually sold over a given period. It equals rooms sold divided by rooms available, multiplied by 100.
Formula
Occupancy Rate (%) = (Rooms Sold / Available Rooms) × 100
Worked example
Occupancy Rate
Occupancy is the demand-side metric in the RevPAR equation. Average European hotel occupancy is around 65-70%, with city-centre properties exceeding 80% and resort properties in shoulder season often below 50%. A higher occupancy rate isn't automatically better — pushed too hard with discounts, it cannibalises ADR and depresses RevPAR. Strong revenue managers segment occupancy by source (direct, OTA, corporate, group) because each segment carries different cost and lifetime value.
Why it matters
Occupancy is the easiest lever for a hotel to read but the most dangerous to over-pull. A property at 95% occupancy is leaving rate on the table; a property at 50% with high ADR may be over-priced. The art is using occupancy to inform pricing changes for forward dates.
Free calculators
Frequently asked questions
Most healthy independent hotels run 65-80% annual occupancy. City hotels exceed 80% in peak season; resort hotels swing widely between seasons. Below 50% sustained means a pricing or distribution problem.
Standards vary. STR uses available room nights — if a room is out of order for renovation, exclude it from the denominator. House-use rooms are usually included as available.
Sum room nights sold across the year, then divide by (room count × 365). Example: 28,000 room nights / (100 × 365) = 76.7%.
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Written by
Maciej Dudziak
Co-founder
.NET developer with 10+ years of experience building scalable back-end systems. Specializes in .NET, Azure, and modern databases.
Published: May 15, 2026