What is the meaning / definition of Bed Nights in the hospitality industry?
Bed Nights is a measurement term used in the hospitality industry. It allows key insights that other measurements overlook. It allows key insights that other measurements overlook and it is key in every Revenue Management Strategy.
How to calculate Bed Nights?
Total number of beds occupied by a person/ total number of beds available = Bed Night
Take for example a hotel with 50 rooms – each room has two Beds. Therefore the hotel has a total of 100 beds available for every night. Now imagine your hotel has 50 people staying for a night. These 50 people could, if each books their own room occupy 100%, creating full occupancy of your hotel. But, on the other hand they could also only occupy 50%, or a composition (ranging from 50% to 100%). Instead of calculating occupancy percentage (Occ. Rooms/ Total Rooms available = Occ %) – you could therefore calculate Bed Nights %. Allowing you an insight in how your hotel is performing on Bed occupancy. So why do this ?
As the famous statement by Peter Drucker goes: “You can’t manage what you can’t measure.” Therefore, if you notice that your facilities are currently underperforming although your occupancy percentage has been stable, you might want to calculate Bed Nights in order to identify if your hotel was occupied by less people per room than usually. This measurement therefore can give crucial insights and allows you to take actions to increase bed nights. This can be done for example only accepting two people to double rooms. If your hotel profits largely from its in-house facilities Bed Nights % is a must have ratio, that can allow you to increase revenues greatly.