Occupancy rate is a key metric in the hospitality industry that measures the percentage of available rooms or space that's occupied over a period of time. It's calculated by dividing the number of occupied rooms by the total number of available rooms and multiplying by 100. For example, if a hotel has 100 rooms and 75 are occupied, the occupancy rate is 75%.
This is a crucial tool for hospitality managers as it directly affects revenue and informs decision-making. A high occupancy rate means strong demand and good marketing, while a low rate means pricing or marketing needs to be adjusted. By tracking occupancy rates over time, you can see patterns, forecast demand, and make informed decisions on staffing, maintenance schedules, and revenue management.
Let's say you're the manager of a busy beachside restaurant with 50 tables. Over a busy summer weekend, you notice 45 tables are full during dinner service. That's an occupancy rate of 90%. You use this to justify hiring more staff for the summer, adjusting your food ordering to meet the demand, and potentially introducing a reservation system to manage the volume of customers better. You might also consider extending your outdoor seating to capitalise on the demand and increase your occupancy rate even more.'