Hotel Room Rate Calculator
Find the room rate that covers your costs, OTA commission and profit target — with a break-even and floor rate for quiet days.
How to calculate the right room rate for your hotel
Many owners set prices by copying the hotel next door. A better starting point is your own cost structure: the rate must cover fixed costs, the variable cost of every occupied room, OTA commission and your profit target. This hotel room rate calculator does exactly that and gives you three numbers — a recommended average rate, a break-even rate and an absolute floor rate.
What the three rates mean
| Rate | Use it for |
|---|---|
| Recommended ADR | Your average target across the month, mixing high and low days |
| Break-even rate | The average you need just to cover costs — below this you lose money |
| Floor rate | The lowest price for a single last-minute night; never go below it |
Next step: turn one rate into a pricing strategy
An average rate is not a price list. Weekends, festivals, events and seasons need different prices, and your rate must react to booking pace and competitors. Learn how in our guides to dynamic pricing and demand forecasting, or let our team manage it with hotel revenue management.
Frequently asked questions
How do hotels decide room rates?
Hotels start from costs and profit targets, then adjust for demand: season, day of week, events, booking pace and competitor prices. Revenue managers change rates often so each night sells at the best possible price.
What is a floor rate in hotels?
A floor rate is the lowest price a hotel will accept for a room night. It should at least cover the variable cost of the stay plus channel commission, so a booking never loses money.
Should I include OTA commission in my room rate?
Yes. If a large share of bookings comes from OTAs, your rates must cover the commission and the GST on it, otherwise your real margin is much lower than planned.
How often should I change my room rates?
Most independent hotels review rates at least weekly and daily during peak periods or events. Larger hotels and those using revenue management tools adjust several times a day.
Want a revenue expert to check your numbers?
Get a free OTA, pricing and reputation audit from Revgrow360 — no obligation.