What is the typical break-even point for a hotel's occupancy rate?

The hotel's occupancy rate and average room rate are two important indicators related to hotel revenue. How to set the hotel's average room rate and occupancy rate targets are issues that hotel operators need to focus on and think about. At what occupancy rate is the hotel's break-even point?

For the hotel industry, occupancy rate often becomes the core indicator for industry insiders to measure the level of hotel operations, and an occupancy rate of 70 is a more commonly used break-even point. However, this is just a simple number. In actual operations, you cannot simply look at hotel occupancy rates to formulate marketing strategies. The occupancy rate is affected by many aspects

The first thing that affects the occupancy rate must be the price, which is also related to the hotel operator's marketing strategy. Hotel operators generally set a standard room rate for the hotel and make a series of dynamic settings linked to the standard room rate. They release different dynamic prices based on different customer sources, different dates, different sales channels, etc.

Another factor that affects the occupancy rate must be the hardware provided by the hotel, which can cover a wide range of areas, including the hotel's geographical location, transportation factors, supporting facilities, furniture, etc. For some brand hotels, especially those managed by international hotel groups, there is a clear set of standards for some of the hotel's "hardware", such as the supplier of bedding, the size of the room, etc. Although the project owner is the investor, there are still It is necessary to ensure that the selection is within the framework of the hotel brand to ensure brand unity.

Finally, in addition to the "hardware" provided by the hotel, the impact on the occupancy rate must also face the evaluation of the "software" provided by the hotel from the guests. How important word-of-mouth marketing is in the Internet era, I won’t go into details here, but as consumers, we can sometimes feel that even the placement of a towel will leave a good or bad impression on the hotel’s service. brand impression and directly impact our next booking. What should hotel owners do amid the epidemic?

As a hotel operator, the occupancy rates of hotels of different grades are also different. According to the situation of the hotel, reasonable average room rates and occupancy rate indicators should be formulated.

Since this year, the hotel industry has been greatly affected by the epidemic. However, under normalized prevention and control, the industry has begun to adapt to the impact of the epidemic and has begun to integrate and reshuffle. More and more hotel chains are expanding their business scale through mergers and acquisitions, forming a trend of industry consolidation. In 2019, the penetration rate of hotel chains in my country was 24.9, and it is expected to reach about 27.3 in 2020.

Under this market trend, if you want to double your revenue during the epidemic, you may wish to consider joining a qualified hotel brand. In addition to directly increasing the visibility of the project, the most direct way is to use chain brands The brand effect can increase the occupancy rate and average room price of the project, thereby achieving the purpose of increasing revenue.