Room Rate Optimizer Calculator

1. Enter your base rate and, if available, a competitor average rate.
2. Set commission, fixed cost, variable cost, and your target margin.
3. Provide demand index, seasonality, and any special event adjustment.
4. Compare forecast occupancy against your target occupancy.
5. Enter lead time, length of stay, and calendar flags (weekend/holiday).
6. Click Optimize rate; review the drivers and cost floors.
7. Download CSV/PDF for sharing, then test in your channels.

Occupancy Gap Pricing

Use target occupancy versus forecast occupancy to model price pressure. The optimizer multiplies the gap by 0.45 and caps the change at ±18%. Example: target 78% and forecast 86% is an 8‑point gap, producing a +3.6% rate lift (8 × 0.45). Negative gaps reduce price to support pickup, while floors prevent underpricing. Review the driver notes to validate the uplift.

Demand, Seasonality, and Events

Demand is entered as an index (20–250) and converted to a factor by dividing by 100. Seasonality and event inputs apply additional percentage multipliers. With Demand 125, Seasonality +10%, and Event +8%, the combined uplift is 1.25 × 1.10 × 1.08 ≈ 1.485 before timing and cost checks. Use seasonality for month-level patterns and the event field for date-specific spikes.

Lead Time and Length of Stay Curve

Lead time follows a bounded curve of roughly 0.94 to 1.12, reflecting that nearer dates can command higher prices. With 7 days to arrival, the factor is about 1.092; with 60 days, it trends lower. Length of stay applies a 1.5% discount per additional night, capped at 10%. A 4‑night stay receives about a 4.5% reduction, supporting conversion without losing control.

Calendar and Policy Controls

Weekend and holiday flags add premiums of 8% and 12%. When both apply, the combined effect is 1.08 × 1.12 ≈ 1.210 before other factors. Cancellation policy tunes risk: flexible adds +2%, strict applies −1%. These small levers help align price with guest willingness to pay and refund exposure.

Cost Floors, Commission, and Margin Guardrails

Commission reduces net revenue, so a 15% commission yields a net factor of 0.85. Break-even is Cost ÷ (1 − Commission). With costs of 5,700, break-even is 5,700 ÷ 0.85 ≈ 6,706. The target margin floor is Cost ÷ ((1 − Commission) × (1 − Margin)); at an 18% margin target, that is about 8,178. The recommendation is clamped between the higher of your floor or margin floor and your ceiling. If a competitor rate is provided, the model blends 60% computed price with 40% competitor anchoring and adjusts by review-based quality (2.5% per point, capped at ±8%).

What should I enter as the base rate?

Use your current best-available rate for the same room and date. If you manage multiple channels, start with your direct rate and then include commission so net comparisons stay consistent.

Is competitor pricing required?

No. If you leave competitor rate blank, the optimizer relies on your inputs only. When you provide a competitor average, the tool blends it with your computed price for a more market-aware recommendation.

How do I set the demand index?

Treat 100 as normal. Use pickup pace, search volume, local events, and historical booking curves to move the index up or down. Start with small changes, like 90–110, then refine as you learn.

Why are break-even and margin floors shown?

They protect profitability. The break-even rate ensures net revenue covers fixed and variable costs after commission. The margin floor raises the minimum rate further to meet your target net profit margin.

Can I use it for packages or long stays?

Yes. Increase length of stay to apply the built-in discount curve, and reflect package value in a higher base rate or event adjustment. Always validate against total revenue per booking and cancellation risk.

How should I interpret the “Balanced, Premium, Value” band?

It is a quick label based on how far the recommendation moves from the base rate. Use it to communicate strategy internally, but rely on the numeric outputs and driver notes for final decisions.