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Occupancy Ratios
• Measures the success of the front office in selling rooms.– Common data includes:
• Number of Rooms Available for sale• Number of Rooms Sold• Number of Guests• Net Rooms Revenue
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Occupancy Ratios: Occupancy Percent
• Proportion of rooms sold or occupied during a specific time period (Day, Month, Year)
• Rooms Occupied / Rooms Available• Example : Rooms Occupied = 750;
Rooms Available = 1000• 750 / 1000 = .75 or 75%
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Occupancy Ratios: Average Daily Rate (ADR)
• The average of all the room rates on the property.
• Room Revenue / Rooms Sold• Example: Room Revenue = $125,000
and Rooms Sold = 700
– $125,000 / 700– ADR = $178.57
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Occupancy Ratios: REVPAR
• Measures Financial Performance– Based on Total Available Rooms
• Room Revenue / Available Rooms• Example: Room Revenue = $125,000
and Available Rooms = 1000• $125,000 / 1000• Revpar = $125.00
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Occupancy Ratios: Yield Statistic
• Ratio of actual room revenue to potential room revenue.
• Actual Rooms Revenue / Potential Room Revenue
• Example: Rack rate = 189.00; Number of Rooms sold = 700
• Potential Room Revenue = $189 X 700 = $132,300
• Actual Revenue was $105,623 • $105,623 / $132,300• = 79%
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Occupancy Ratio Exercise
• Last night the Triple Diamond Resort reported the following:
• 1,250 rooms were available for sale; 1,132 rooms were sold; Room revenue was $201,858 and the rack rate for the evening was $209.00
• What was the Occupancy Percent? What was the ADR? What was the Revpar? What was the Yield Statistic?
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Budgeting for Operations
• Most important long term planning function.
• Addresses– Revenues– Expenses
• Used to evaluate the actual results of the operation.
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Forecasting Room Revenue
• Rooms Available X Occupancy Percentage X ADR
– Rooms Available = 43,800– Occupancy % = .76 (76%)– ADR = 132.66
• 43,800 X 76% X $132.66 = $4,415,986
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Estimating Expenses
• Direct Expenses (Payroll, Guest Supplies, Laundry)– Vary in proportion to rooms revenue– Historical Data can be used based on a
percentage of room revenue.
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Examples
• Room Revenue = $1,997,280– Payroll = 17.6%
• Estimated Payroll = $351,521• $1,997,280 X 17.6%
– Guest Supplies = 3.2%• Estimated Laundry = $63,912• $1,997,280 X 3.2%
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