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?

Comments (9)

  • Analyst 1 in RE - Comm
Nov 28, 2021 - 1:47pm

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.

  • Analyst 1 in RE - Comm
Nov 28, 2021 - 2:30pm

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?

Nov 28, 2021 - 2:37pm

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.

  • Analyst 1 in RE - Comm
Nov 28, 2021 - 2:46pm

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

Dec 7, 2021 - 12:44am

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.

  • Analyst 1 in RE - Comm
Nov 29, 2021 - 5:30am

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