CLODGING LAB

1. CLODGING
How Hotels Count and Measure
From Check-in Check-out: Managing Hotel
Operations By G. Vallen & J. Vallen
M. Aldana
SHTM Faculty

2. Occupancy
Hotel Occupancy
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3. Occupancy
• Occupancy is a measure of supply and
demand, it gauges the hotel industry’s
economic health.
• Robust demand encourages
construction, while falling demand
seals the fate of old hotels.
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4. Occupancy
• In computing for the occupancy rate (percentage of occupancy), we look at two things:
• The number of rooms available
• The number of rooms occupied (number of rooms sold)
• Hoteliers count this figure every night.
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5. Percentage of Occupancy (Occupancy Rate)
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6. Salesper
OccupiedRoom
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7. Sales per Occupied Room
• While Occupancy measures quantity,
Sales per occupied room (Average Daily
Rate ADR) measures quality.
• The health of the industry is reflected in
both occupancy and price.
• Price, ADR, increases as occupancy
increases.
• The more rooms sold – the greater the
demand – the higher the room rate.
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8. Average Daily Rate
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9. RevPar
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10. Revenue per Available Room (RevPar)
• RevPar or average rate per available
room measures management’s ability to
keep rates high even as occupancy
declines.
• Normally, guests elect lower rates when
an empty house allows it. Superior
managers strive to keep rates high even
as occupancy dips within the cycle.
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11. RevPar
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12. Revenue per Available Room (RevPar)
• RevPar reflects the revenue (sales)
relative to total rooms available for sale.
• Remember,
• Total room sales must not include taxes
nor the value of free breakfasts or free
parking.
• The number of rooms available must
include vacant rooms but not those
permanently assigned to other uses.
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13. Double
Occupancy
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14. Double Occupancy (Percentage of Double Occupancy)
• Multiple occupancy is a better term than double
occupancy because more than two guests may be housed
in one room.
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15. Break-Even
Point
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16. Break-Even Point
• To break even is to have neither profit nor loss.
• Inflows from revenues match exactly outflows
from costs.
• Break-even points are important, because
there is no profit until that point is reached.
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17. Example
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• Compute for:
• % of Occupancy
• ADR
• RevPar
• Number of Employees per guest room
• % of Double Occupancy
• Number of Rooms Available for Sale – 640
• Number of Rooms in the Hotel – 643
• Number of Rooms Sold – 520
• Income from Room Sales - $ 149,920
• Employees on staff – 461
• Number of guests last night – 600

18. % of Occupancy
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19. ADR
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20. RevPar
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21. Number of Employees per guest room
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22. % of Double Occupancy
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23. Example
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• Compute for:
• % of Occupancy
• ADR
• RevPar
• Number of Employees per guest room
• % of Double Occupancy
• Number of Rooms Available for Sale – 140
• Number of Rooms in the Hotel – 142
• Number of Rooms Sold – 138
• Income from Room Sales – PHP. 1,100,600
• Employees on staff – 100
• Number of guests last night – 168

24. % of Occupancy
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25. ADR
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26. RevPar
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27. Number of Employees per guest room
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28. % of Double Occupancy
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29. Seatwork – ½ crosswise
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• Number of Rooms Available for Sale – 421
• Number of Rooms in the Hotel – 500
• Number of Rooms Sold – 390
• Income from Room Sales – PHP. 785,400
• Employees on staff – 352
• Number of guests last night – 477
• Compute for:
1. % of Occupancy
2. ADR
3. RevPar
4. Number of Employees per guest room
5. % of Double Occupancy
• Number of Rooms Available for Sale – 230
• Number of Rooms in the Hotel – 265
• Number of Rooms Sold – 189
• Income from Room Sales – PHP. 300,500
• Employees on staff – 90
• Number of guests last night – 201
• Compute for:
1. % of Occupancy
2. ADR
3. RevPar
4. Number of Employees per guest room
5. % of Double Occupancy

30. ThankYou
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