Hotel Break-Even Occupancy Calculator

Break-even occupancy is the minimum percentage of your rooms you must sell to cover all costs, with zero profit and zero loss. Below it the hotel loses money; above it every additional room sold contributes to profit. It is calculated by dividing fixed costs by the contribution margin per room (ADR minus CPOR) times your total available room-nights.

The formula is: break-even occupancy % = fixed costs / ((ADR - CPOR) x rooms available x nights). The numerator is your total fixed costs for the period. The denominator is the contribution margin per room (ADR minus the cost per occupied room) multiplied by total available room-nights. The result is the share of capacity you must sell to break even.

ADR minus CPOR is the contribution margin: the amount each occupied room contributes toward fixed costs after covering its own variable cost. If ADR is below CPOR, each room sold loses money before any fixed cost is even considered, so no level of occupancy can ever break even. The calculator flags this as an error because the business model is unviable at that rate and cost structure.

A break-even occupancy above 100% means your fixed costs are too high to be covered even by selling every room at the current ADR and CPOR. This is a warning that the operation is not sustainable as configured: you must either raise ADR, cut the cost per occupied room, reduce fixed costs, or add capacity. The calculator highlights this scenario rather than reporting an impossible occupancy figure.

A restaurant break-even is built around covers and average check; a hotel break-even is built around rooms, ADR and capacity. This calculator uses the cost per occupied room (CPOR) as the variable cost and the available room-nights (rooms x nights) as capacity, producing a break-even expressed as an occupancy percentage, rooms to sell per night, and break-even revenue, which is the language hotel operators actually use.