Definition
The percentage of available rooms that are occupied, calculated as rooms sold ÷ rooms available (× 100). While high occupancy is positive, it's not the ultimate goal—selling 100% of rooms at low rates may generate less profit than 80% occupancy at premium rates. Always evaluate occupancy alongside ADR and RevPAR for the complete picture.
Related Terms
ADRAverage Daily Rate
The average revenue earned per sold room in a given period. Calculated by dividing total room revenue by the number of rooms sold. ADR is one of the three fundamental KPIs in hotel revenue management, alongside occupancy and RevPAR, and directly reflects your pricing strategy's effectiveness.
Learn more →ARIAverage Rate Index
A competitive benchmarking metric that compares your hotel's ADR to the average ADR of your competitive set. An ARI above 100 means you're achieving higher rates than competitors; below 100 indicates you're pricing below market. Use ARI alongside MPI and RGI for a complete competitive picture.
Learn more →GOPPARGross Operating Profit Per Available Room
The most comprehensive profitability metric in hospitality, measuring actual profit generated per available room after all operating expenses. Unlike RevPAR which only considers revenue, GOPPAR accounts for costs—making it the truest measure of operational efficiency. A hotel can have high RevPAR but low GOPPAR if costs are poorly managed.
Learn more →MPIMarket Penetration Index
A competitive metric comparing your hotel's occupancy to your compset's average occupancy. MPI above 100 means you're capturing more than your fair share of demand; below 100 indicates competitors are winning more bookings. MPI reveals whether your distribution, visibility, or value proposition needs attention—even if absolute occupancy looks healthy.
Learn more →Want to improve your Occupancy Rate?
Sigma Revenue helps hotels improve their key metrics through data-driven revenue management.