Note: this article covers general hospitality occupancy concepts. For how Pricepoint specifically calculates occupancy, see [How does Pricepoint calculate occupancy?].
Occupancy is a key metric in the hospitality industry, it refers to the percentage of available rooms occupied by guests at a given time. It's used to measure the effectiveness of a hotel's sales and marketing efforts, as well as its overall appeal to guests.
What are the two common ways to calculate occupancy?
Based on total inventory: occupancy is calculated using the number of rooms sold relative to the property's total physical room count, including rooms that may be blocked, under maintenance, or otherwise not available for sale.
Occupancy Rate = (Rooms Sold / Total Physical Rooms) × 100%
Example: a hotel with 200 physical rooms and 150 sold has an occupancy rate of (150/200) × 100% = 75%
Based on available inventory: occupancy is calculated using the number of rooms sold relative to only the rooms actually available for booking, excluding anything blocked, under maintenance, or otherwise out of service.
Occupancy Rate = (Rooms Sold / Rooms Available for Booking) × 100%
Example: the same hotel has 10 rooms blocked for renovation, leaving 190 available for booking. With 150 sold, occupancy is (150/190) × 100% = 78.9%
Which is better?
It depends on what you're trying to measure:
Total inventory reflects how much of your full physical property is being used, including any blocked or out-of-service rooms in the denominator. This gives a consistent, stable baseline that isn't affected by short-term changes in which rooms are available to sell.
Available inventory reflects performance against only what could actually be sold at the time, excluding blocked or out-of-service rooms. This can give a more precise read of sales performance in periods where availability is fluctuating.