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How many rooms do you need to sell not to lose money?
Your hotel's break-even point in two minutes: the occupancy that covers all of the year's costs, and the average rate you shouldn't go below.
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How to read it
Every room you sell leaves a margin: the rate minus VAT, commissions and the costs that only exist when someone sleeps there. Staff, rent and utilities you pay regardless. Break-even is the number of rooms whose margins cover all of those fixed costs. Every room beyond that is profit.
If break-even occupancy is above the occupancy you actually run, the numbers don't add up, whatever the revenue. There are three levers: average rate, what you leave to the OTAs and what each room costs you. The calculator shows which one weighs most in your case.
It is a yearly, approximate figure. To do it month by month, with real invoices and costs split by department, you need management accounting: that is what CostCore does.
Are seasonal staff a fixed or a variable cost?
For this calculation, fixed. The people you hire for the season get paid on half-empty nights too. Only the extra help called in by the day when you're full is variable: if you have any, add it to the cost per occupied room.
Why is the commission calculated on the VAT-inclusive rate?
Because that is how OTAs charge it: Booking.com applies its percentage to the price the guest pays, VAT included. Calculating it on the net amount gives a nicer and wrong result.
How do I estimate the cost per occupied room?
Add up what you spend only when the room sells: cleaning time (if you pay per room or per hour), linen laundry, breakfast for two, amenities. For a three-star with breakfast it is usually between 20 and 40 euros. If you don't know, try two values and see how much the result changes.
Where do I find the year's fixed costs?
In the income statement of your last annual accounts. Remove the expenses that grow with rooms sold (linen, breakfasts, amenities) and what is left is a good approximation of fixed costs. Leave depreciation out if you already enter loan or lease payments, otherwise you count them twice.
What about restaurant, bar and extra services revenue?
This calculator looks at rooms only. If the restaurant or bar make money, they lower break-even; if they lose money, they raise it. To know which, you need revenue and costs split by department.
Do you see the numbers I enter?
No. Your browser does the maths and nothing is sent. The link you can copy holds the numbers after the # sign, a part of the address browsers never send to the server.
This calculation, every month, from your invoices
CostCore reads your invoices, splits costs by department and shows you where the margin is.
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