Calculator Inputs
Use the responsive form below. Large screens show three columns, smaller screens show two, and mobile shows one.
Formula Used
1. Gross Room RevenueAverage Daily Rate x Sold Room Nights
2. Net Room RevenueGross Room Revenue - Discount Amount
3. Discount AmountGross Room Revenue x Discount Percent
4. Total RevenueNet Room Revenue + Ancillary Revenue
5. Total Variable CostsRoom Costs + Ancillary Variable Costs + OTA Commission + Payment Processing
6. Contribution MarginTotal Revenue - Total Variable Costs
7. Operating Room MarginContribution Margin - Allocated Fixed Overhead
8. Operating Margin PercentOperating Room Margin / Total Revenue x 100
9. Occupancy RateSold Room Nights / Available Room Nights x 100
10. Break-Even Sold NightsAllocated Fixed Overhead / Contribution Per Sold Night
This model excludes taxes collected on behalf of authorities unless you deliberately include them inside net revenue assumptions.
How to Use This Calculator
- Enter the average daily rate and total sold room nights for your period.
- Add capacity inputs using available rooms and the number of operating days.
- Input discounts, OTA commission, and payment processing percentages.
- Enter all room-related variable costs per sold night, including housekeeping, utilities, linen, labor, maintenance, and other costs.
- Add ancillary revenue and ancillary variable cost per sold night if guests generate extra spend.
- Enter the fixed overhead allocated to the room department for the same period.
- Press the calculate button to show results below the header and above the form.
- Use the CSV and PDF buttons to save, report, or compare scenarios.
Example Data Table
| Example Metric | Value |
|---|---|
| Average Daily Rate | $145.00 |
| Sold Room Nights | 420.00 |
| Available Room Nights | 900.00 |
| Occupancy Rate | 46.67% |
| Net Room Revenue | $56,028.00 |
| Ancillary Revenue | $7,560.00 |
| Total Revenue | $63,588.00 |
| Total Variable Costs | $29,895.18 |
| Contribution Margin | $33,692.82 |
| Operating Room Margin | $21,192.82 |
| Operating Margin Percent | 33.33% |
| Break-Even Sold Nights | 155.82 |
Frequently Asked Questions
1. What does room margin show?
Room margin shows how much revenue remains after room-related costs and allocated overhead. It helps reveal if pricing, occupancy, and distribution costs produce real profit.
2. Why separate contribution margin from operating margin?
Contribution margin shows performance before fixed overhead. Operating margin goes further by subtracting allocated overhead, giving a more complete view of departmental profitability.
3. Should taxes be included in revenue?
Usually no. Taxes collected for governments are normally pass-through amounts. Excluding them keeps room margin focused on revenue the property actually retains.
4. What counts as ancillary revenue here?
Ancillary revenue can include minibar, breakfast packages, parking, late checkout, resort fees, or room upsell income tied to occupied room nights.
5. How should OTA commission be entered?
Enter the weighted average commission percentage across relevant bookings. If direct bookings dominate, lower OTA commission will improve room margin quickly.
6. What if my break-even sold nights look too high?
A high break-even level usually means low rate quality, heavy discounting, costly channels, or excessive variable and fixed costs. Test each driver separately.
7. Can I use this for weekly or yearly periods?
Yes. The calculator works for any period as long as all revenue, room nights, and overhead values cover the same exact timeframe.
8. How can this support pricing decisions?
Run multiple scenarios with different ADRs, discounts, and cost assumptions. Comparing margin per available room night helps identify stronger pricing strategies.