3 biggest myths about hotel occupancy
Jun 02, 2014
Proper pricing adjustments, which take real existing demand into account, are the key to increased profitability. Occupancy is not the sole indicator of true demand. Various parameters need to be taken into account in order to make the correct decisions that lead to profit maximization.
Occupancy is one of the three main indexes used in the science of Revenue Management (along with ADR and RevPAR). It is the percentage of all rental units in the hotel that are occupied at a given time. Occupancy is calculated as: number of occupied rooms/number of total available rooms, and is expressed as a percentage.
The three main misconceptions about occupancy that are still prevailing in the hotel industry are:
Occupancy should be the target for maximization
Occupancy should be forecasted
Occupancy should be the indicator and trigger for price adjustments
The following article reviews these misconceptions.
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