Calculating Occupancy Rates - Confusion
Hi ,
I am trying figure out how to calculate average occupancy for a hotel portfolio.
I have stabilised and ramp-up.
I have done:
rooms available * Days = Sellable Room Nights
Sellable room nights * occupancy = occupied rooms/room nights sold
When calculating those that are stabilised do you just look at room night sold/available for only stabilised or is it divided by total room nights available , i.e. Stabilised Room night sold/Stabilised room nights available vs Stabilised Room night sold/Total Room nights available
Vice versa with ramp-ups?
Any help?
I think you might need to clarify your question. Calculating average portfolio occupancy is simply the aggregate total rooms sold divided by total rooms available across the portfolio over a 12 month historical period.
I’ve got occupancy for hotels which are categorised as either stabilised, ramp-up etc I have occupancy but if I want to work out what the occupancy is for stabilised hotels how do I do that
I have the sellable room nights etc.
Sounds like you have occupancy for the overall portfolio but you need to isolate occupancy for the stabilized assets?
If that's the case you need to either isolate the room nights sold @ room nights available for the stabilized assets; or back out room nights sold @ room nights available from the portfolio for the unstabilized assets
So what I have done is taken Sellable Room Nights * Occupancy to get the Room Nights Occupied – I now need to get the stabilised occupancy.
I am unsure whether I take the total stabilised room nights occupied / total stabilised room night available OR / total room nights available?
I think you're think about this backwards. Generally you just apply a stabilized occupancy factor to each hotel in the portfolio (using a penetration figure based off the STR comp set, dependent on how your subject hotel strategically competes). You do the same thing for ADR which results in RevPar which you also compare to the comp set.
Some hotels compete on rate or occupancy, you set a strategy based on your product offering relative to the comp set.
Sorry - I basically have flags to let me know when a hotel is stabilised or ramp-up - as well as occupancy for each hotel in general - with this I can determine what hotels are are in either mode. I thought it is now a case of taking those figures / either total stabilised or total hotel rooms available
Occupied room nights for stabilized assets / available room nights for just the stabilized asset. Remember it should be an apples to apples sort of thing. So that would be the occupancy rate of the stabilized assets.
Stabilized occupancy is something completely different and would just refer to the ramping up assets. They have respective stabilized occupancy rate where they won’t be classified as ramping up once they achieve that occupancy.
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