What occupancy
pays the bills?
Start with five figures the hotel normally already knows. The model plots room revenue against total cost and marks the occupancy where contribution covers the fixed costs for the period.
Five inputs are enough for a first commercial read.
Variable cost per occupied room is the extra cost created by selling another room - housekeeping, linen/laundry, amenities, occupancy-related utilities and other direct per-room costs. If breakfast is included and its cost rises with occupancy, include its variable portion too.
Fixed costs for the period are the costs the hotel carries regardless of whether a room is occupied - base payroll, rent or financing, insurance, software, base utilities, contracts and other overheads.
The optional distribution inputs add OTA commission and payment fees so the contribution per occupied room can reflect more of the actual cost of selling the room.