Enter pricing inputs
Example data table
| Scenario | Current Rate | Demand Index | Competitor Rate | Recommended Rate | Expected Occupancy | RevPAR | GOPPAR |
|---|---|---|---|---|---|---|---|
| Shoulder season | $132.00 | 96 | $136.00 | $134.80 | 67.40% | $90.86 | $28.11 |
| Concert week | $145.00 | 118 | $168.00 | $163.24 | 79.20% | $129.28 | $47.64 |
| Low-demand recovery | $140.00 | 88 | $137.00 | $131.60 | 63.90% | $84.09 | $22.95 |
Formula used
The tool blends market signals, cost recovery, and booking behavior to recommend a practical room rate.
- Demand factor
Demand Factor = (Market Demand Index / 100) × (Seasonality Index / 100) × (1 + Event Uplift %) - Raw recommended rate
Current Rate × Demand Multiplier × Competition Multiplier × Lead Time Factor × Weekend Mix Factor - Margin floor rate
((Variable Cost + Fixed Cost / Expected Occupied Room-nights) / (1 - Target Margin)) / Blended Collection Factor - Final recommended rate
Clamp(Max(Raw Recommended Rate, Margin Floor Rate), Minimum Rate, Maximum Rate) - Occupancy after pricing
Expected Occupancy × Price Sensitivity Factor × Competitor Boost × (1 - Cancellation Rate) - Revenue metrics
RevPAR = Gross Room Revenue / Available Room-nightsGOPPAR = Operating Profit / Available Room-nights
This approach is designed for planning support. It does not replace RMS rules, brand restrictions, negotiated contracts, or manual revenue judgment.
How to use this calculator
- Enter available rooms and the number of pricing days.
- Fill in current rate, allowed rate range, and forecast occupancy.
- Add competitor rate, market demand index, seasonality, and event uplift.
- Include lead time, cancellation risk, weekend mix, and premium.
- Enter OTA share, commission, ancillary revenue, and operating costs.
- Set your target margin and submit the form.
- Review the recommended rate, occupancy, RevPAR, and GOPPAR.
- Export the result to CSV or PDF for review.
Frequently asked questions
1. What does the tool optimize?
It balances rate growth, expected occupancy, distribution costs, and target margin. The goal is a rate that supports stronger revenue quality, not just a higher headline ADR.
2. Why is price elasticity negative?
A negative elasticity means higher prices usually reduce demand. More negative values imply customers are more sensitive, so even a small rate increase may trim occupancy more noticeably.
3. How should I set the market demand index?
Use 100 as your normal baseline. Values above 100 represent stronger demand. Values below 100 represent softer conditions, such as weak travel periods or slower booking pace.
4. What is the difference between RevPAR and GOPPAR?
RevPAR measures room revenue per available room-night. GOPPAR goes further by subtracting operating costs, giving a more realistic profitability view for the pricing decision.
5. Why does OTA mix matter so much?
Higher OTA share lowers net collections because commission reduces realized room revenue. A property with heavy intermediary dependence often needs a stronger gross rate to hit the same margin.
6. Can I use this for daily pricing?
Yes. It works for a single day, weekend, week, or longer window. Just align rooms, days, fixed costs, and demand signals with the same pricing period.
7. What does the break-even occupancy tell me?
It estimates the occupancy needed to cover fixed and variable costs at the recommended rate. Lower break-even occupancy gives more buffer against booking volatility.
8. Should I blindly accept the recommended rate?
No. Treat it as a decision aid. Always check local events, brand rules, group blocks, parity obligations, and strategic goals before making live inventory changes.
Printed from the Hotel Pricing Optimization Tool.