What are the most important Formulas in the hospitality industry and how to calculate them?

Here you will find the top 5 Key Performance Indicators (KPI):

Occupancy

It is a Hotel KPI calculation that shows the percentage of available rooms or beds being sold for a certain period of time.
It is important for hotels to keep track of this data on a daily basis to identify the average daily rate, forecast and apply revenue management.

How do you calculate Occupancy?

Formula: Occupancy = Rooms Sold / Room Available

ADR

ADR stands for: Average Daily Rate.
It is a KPI to calculate the average price or rate for each hotel room sold for a specific day.

It is one of the most common financial indicators to measure how successful the performance of the hotel is against other hotels that have similar characteristics such as size, clientele and location and/or its own previous figures.

How do you calculate ADR?

Formula:
ADR = Room Revenue / Rooms Sold

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