Break-even Occupancy Calculator
Find the occupancy and ADR your hotel needs every month to cover salaries, rent, EMI and OTA commission.
What break-even occupancy means
Break-even occupancy is the occupancy at which room revenue exactly covers your costs, with zero profit and zero loss. Below it, every month adds to your losses; above it, every extra room sold adds profit. For new hotels, homestays and leased properties, it is the most important number to know before you sign a lease or take a loan.
This calculator also removes OTA commission (with 18% GST on the commission if you choose) from ADR, because a room sold through an OTA brings in less money than one sold direct.
Worked example
A 25-room hotel has 750 room nights in a 30-day month. Fixed costs are ₹7,50,000 a month, ADR is ₹3,000 and variable cost is ₹600 per occupied room.
- Contribution per room night = ₹3,000 − ₹600 = ₹2,400
- Break-even room nights = ₹7,50,000 ÷ ₹2,400 = 313 (rounded up)
- Break-even occupancy = 312.5 ÷ 750 = 41.7%
Now add OTAs: if 60% of room nights come from OTAs at 18% commission plus GST, the average deduction is about 12.7% of ADR. Contribution falls to about ₹2,018 and break-even rises to roughly 49.6%. That is why channel mix matters.
Fixed vs variable costs
- Fixed: salaries, rent or lease, loan EMI, minimum electricity charges, security, software subscriptions, insurance and licences.
- Variable (per occupied room): laundry, guest amenities, extra power and water, breakfast cost if included, and cleaning supplies.
How to lower your break-even point
- Increase direct bookings to cut commission.
- Raise ADR on high-demand dates instead of chasing volume at low rates. Use the hotel room rate calculator to set a floor rate.
- Review fixed costs you can make flexible, such as seasonal staff.
- Track actual occupancy against break-even every month with the occupancy rate calculator.
Frequently asked questions
What is a typical break-even occupancy for a hotel?
It varies widely with rent or EMI, staffing, ADR and channel mix. Calculate yours with your own costs instead of relying on a general figure, and recheck it whenever rates or costs change.
Should loan EMI be part of fixed costs?
For an owner's cash break-even, yes, include the monthly EMI along with rent and salaries. For operating break-even only, leave out EMI and depreciation.
Why does OTA commission change break-even?
Commission is deducted from every OTA booking, so each room brings in less money. Lower contribution per room means you must sell more rooms to cover the same fixed costs.
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