Enter hotel room margin inputs
Use this model to evaluate revenue quality, variable costs, channel pressure, and room department break-even performance.
Example data table
This worked example shows how the calculator translates room revenue and variable operating costs into contribution margin and break-even insight.
| Sample Input or Output | Value |
|---|---|
| Available room nights | 600 |
| Sold room nights | 480 |
| Average daily rate | 145.00 |
| Ancillary revenue per sold room | 18.00 |
| OTA share / commission | 42.00% / 18.00% |
| Payment processing fee | 2.50% |
| Variable cost per sold room | 27.00 |
| Total revenue | 78,240.00 |
| Total variable cost | 20,177.76 |
| Contribution margin | 58,062.24 |
| Contribution margin ratio | 74.21% |
| Break-even sold room nights | 148.81 |
Formula used
Core equations
- Room Revenue = Sold Room Nights × Average Daily Rate
- Ancillary Revenue = Sold Room Nights × Ancillary Revenue per Sold Room
- OTA Commission Cost = (Room Revenue × OTA Share) × OTA Commission Rate
- Payment Processing Cost = Total Revenue × Payment Fee Rate
- Variable Cost per Sold Room = Housekeeping + Laundry + Amenities + Utilities + Other Variable Cost
- Total Variable Cost = OTA Commission Cost + Payment Processing Cost + (Sold Room Nights × Variable Cost per Sold Room)
- Contribution Margin = Total Revenue − Total Variable Cost
- Contribution Margin Ratio = Contribution Margin ÷ Total Revenue
- Break-even Sold Room Nights = Fixed Room Department Cost ÷ Contribution Margin per Sold Room
Why this matters
Contribution margin shows how much money sold rooms generate before fixed room department costs. It helps compare channels, test pricing decisions, and protect profit when distribution or servicing costs rise.
How to use this calculator
- Enter available room nights and the number of sold room nights for the analysis period.
- Add your average daily rate and any ancillary revenue earned per occupied room.
- Estimate distribution pressure using OTA share, OTA commission, and payment processing fee inputs.
- Enter per-room variable operating costs such as housekeeping, laundry, amenities, utilities, and other guest-driven expenses.
- Include fixed room department cost to estimate break-even sold room nights and post-fixed departmental profit.
- Press Calculate Margin to show results above the form, then export the summary as CSV or PDF.
Frequently asked questions
1. What does room contribution margin measure?
It measures the money left after room revenue and related ancillary revenue cover variable costs tied to occupied rooms. It excludes fixed room department costs until the departmental profit step.
2. Why include OTA share and commission separately?
Separating them gives better channel visibility. A high OTA share with a steep commission rate can reduce room profit even when average daily rate looks strong.
3. Should ancillary revenue be included?
Yes, when it is closely linked to occupied rooms. Breakfast upgrades, parking, resort fees, minibar sales, or room-related add-ons can materially improve contribution margin.
4. Which costs belong in variable room costs?
Use costs that rise with each additional occupied room. Common examples are housekeeping labor, linen and laundry, amenities, in-room utilities, guest supplies, and card processing fees.
5. What if my sold room nights are zero?
The calculator will still show revenue and margin outputs as zero. Per-room and break-even insight become limited because no occupied-room contribution is being generated.
6. How is break-even sold room nights calculated?
It divides fixed room department cost by contribution margin per sold room. The result estimates how many sold room nights are needed to cover fixed room department expenses.
7. Can I use this for monthly or annual analysis?
Yes. The model works for any period as long as revenue, costs, and room-night inputs all cover the same timeframe and use the same assumptions.
8. How can this support hotel pricing decisions?
It shows whether higher rates, lower commissions, or better ancillary capture improve profit quality. That makes it useful for pricing reviews, channel strategy, and budgeting discussions.