Calculating Room Occupancy – a step-by-step guide
There is no statistic closer to the heart of a guest house, lodge, hotel or bed & breakfast owner than room occupancy.
To be clear, room occupancy is the number of times a room (or tree house!) is sold to guests (and thus occupied) in a given period – compared to the maximum number of nights the room can be sold in that period. This number is usually expressed as a percentage.
As a quick example, a room is sold for 15 nights during June (maximum is 30 nights) has a room occupancy of 50%.
If all the rooms in an establishment are pooled and the calculation is run, then the room occupancy for the whole establishment can be determined.
A variation on this calculation is the bed-night occupancy. This calculation focuses on the number of beds available in each room. If the above example is changed such that the room is a 2-bed room and sold for the 15 nights to a single guest, the bed-night occupancy will drop to 25%.
By its very nature of allocating specific rooms to bookings, NightsBridge is the perfect tool to generate room occupancy statistics.
The Occupancy Calculator is such a quick and easy tool that it can be run as often as required.
The Nightsbridge Occupancy Calculator can be found in the Tools drop-down menu. When selected, the occupancy calculator is contained in a single box with all of the fields necessary to calculate occupancy.
First choose the start and end dates of the period in question. Next, exclude any rooms that should not feature in the calculation. Finally, click either the Calculate by Beds (bed-night occupancy) or Calculate by Rooms (room-night occupancy) button to display the result.
However, there are certain circumstances where your definition of occupancy may mean that the occupancy calculator cannot calculate room occupancy to the required degree of precision.
One circumstance is where rooms with a system status of “Unavailable”, are excluded by the occupancy calculator from the total of available rooms, but by your definition should be included.
Another circumstance is where rooms that have been occupied, but have not generated income are included by the occupancy calculator. However, under your definition these rooms should be excluded. Examples of this policy might include room exchanges with other guest houses, complimentary rooms for tour guides and family/friend stays.
If these types of situations occur frequently and are not taken into account, then over the course of the year your occupancy statistics could become seriously distorted.
In order to correct for these occurrences, it is necessary to access the occupancy details and filter out those items that are not required.
Fortunately, Nightsbridge has a neat solution – the Bookings Summary.
The bookings summary can be located within the reports drop-down menu. When selected, the system requests a start and end date and then automatically exports the report into Excel.
In Excel format, the bookings summary is essentially laid out in a grid pattern, with each booking running across the screen. Each column of the grid addresses a specific item of information, such as Arrive Date, Number of Adults, Room Name etc.
At the bottom of the columns dealing with monetary values such as Revenue, Commission, Deposit etc, the report calculates a grand total of all the bookings in the report. This will be very useful in a moment.
The bookings summary is designed to capture all rooms in the selected period that have some form of activity attached to them, whether it be a booking or unavailable status.
As such, we need to separate out those rooms and the true bookings in those rooms to get an accurate room occupancy.
The steps to do this are very simple.
First, move to the top of the column titled “Room Name”. Click on the small arrow at the top of the column. This will open a drop-down menu for filtering the data on display. Simply click off the flag for those rooms that you do not wish to include in the room occupancy calculation. Click OK to close the filter. The data will change to reflect your filter choice.
Next move to the top of the column titled “Revenue”. Again, click the filter arrow. This time, click off the flag for the amount of R0.00. Click OK to close. The data will now exclude all entries with a revenue value of zero. On the basis that all “unavailable” and non-income generating room nights are recorded at a zero room rate, these room nights have been excluded from the bookings summary.
Now we have a list of our true income-generating occupancy. To find the total room nights go to the bottom of the “Revenue” column. Highlight the grand total cell with your mouse, right click and select “copy”. Highlight the cell to the left at the bottom of the “Nights” column, right-click the mouse and select paste. You now have a grand total of room nights occupied.
To complete the calculation, we need to know the maximum room nights available in the period. This is quite simply the number of rooms selected multiplied by the number of nights in the period – for example 4 rooms in April will equal 120 room nights.
The room occupancy is the room night total on the bookings summary divided by the total room nights available. Multiply this by 100 to express as a percentage.
This method of calculating room night occupancy takes more time than the occupancy calculator, but should be used if you have to include a significant number of complimentary rooms.
By Doug Portsmouth. Doug and his wife Gaynor provide consulting services to B&Bs and Guest Houses via their business called Basics 4 Business. They can be contacted at email@example.com.