Calculator
Enter your period assumptions. Submit to see thresholds and a planned-vs-target comparison.
Example Data Table
A realistic sample set you can load into the calculator.
| Rooms | Days | ADR | Occupancy | Commission | Variable Cost | Fixed Cost | Target Profit |
|---|---|---|---|---|---|---|---|
| 80 | 30 | 120 | 65% | 12% | 18 | 120,000 | 10,000 |
Formula Used
- Capacity = Rooms × Days
- Net ADR = ADR × (1 − Commission)
- Contribution Margin = Net ADR − Variable Cost
- Required Nights = (Fixed Cost + Target Profit) ÷ Contribution Margin
- Required Occupancy = Required Nights ÷ Capacity × 100
- Revenue Threshold = Required Nights × ADR
This model treats variable cost as per occupied room-night and fixed cost as period total. Adjust inputs to match your accounting structure.
How to Use This Calculator
- Set your period, room count, and expected occupancy.
- Enter ADR, commission/discount, and variable cost per occupied night.
- Add fixed costs for the same period and a profit target.
- Submit to see required occupancy and revenue thresholds.
- Export PDF or CSV for owners, finance, or operations.
Practical Notes
- Use blended commission if you mix direct and third-party channels.
- Include only room-related variable costs for clean thresholds.
- If contribution margin turns negative, revise pricing or costs.
Contribution margin sets the threshold
This calculator estimates the minimum room revenue needed to cover fixed costs and a chosen profit target for a period. It applies a contribution margin per occupied room-night, computed as net ADR minus variable cost. When margin increases by 10 currency units, required room-nights drop by roughly (fixed cost + target) ÷ 10, improving resilience when demand softens.
Room-night capacity links occupancy and revenue
Capacity is rooms multiplied by days, producing total room-nights available for sale. Required occupancy equals required room-nights divided by capacity. With 80 rooms over 30 days, capacity is 2,400 room-nights; every 1% occupancy shift equals 24 room-nights. If ADR is 120, those 24 nights represent 2,880 of gross revenue before commissions.
Net ADR captures commissions and discounts
Gross ADR is rarely the cash collected. Channel commissions, promotions, and packaged discounts reduce ADR to a net rate. If ADR is 120 and commission is 12%, net ADR becomes 105.60. Cutting commission by two points raises net ADR by 2.40, which raises contribution margin by the same amount if variable costs stay stable. Small rate moves can be tested quickly by resubmitting the form.
Fixed and variable costs reveal breakpoints
Fixed costs include base payroll, rent, insurance, and systems that remain stable across occupancy ranges. Variable cost reflects per-night consumption, such as housekeeping, laundry, amenities, and utilities. When variable cost rises by 5, the same occupancy produces lower contribution, pushing the threshold upward. Use the planned versus threshold panel to compare your current plan against the minimum occupancy and revenue required.
Use exports to manage performance cycles
The CSV and PDF exports support recurring performance reviews with operations, finance, and ownership. Track planned profit, revenue gap, and occupancy gap alongside pickup and pacing data. Update assumptions weekly during high-volatility periods, then confirm monthly for budgeting. Consistent threshold reporting makes decisions on pricing, channel mix, and cost controls easier to justify and communicate. Use the required ADR at planned occupancy metric to set tactical rate floors for each channel. If planned occupancy is fixed, this rate indicates what pricing must average after discounts. Exclude taxes and non-room revenue, then compare results with your P&L.
FAQs
What does the room revenue threshold represent?
It is the minimum gross room revenue required to cover fixed costs and your selected profit target for the period, given your commission and variable cost assumptions.
Should I enter ADR before or after commissions?
Enter your headline ADR. The calculator applies the commission or discount rate to estimate net ADR automatically, then uses net ADR to compute contribution margin and thresholds.
How should I handle taxes, service charges, or resort fees?
Exclude taxes and pass-through charges. Add only amounts that contribute to room revenue. If fees are retained as room income, include them by increasing ADR or reducing commission accordingly.
Can this work with multiple room types and seasons?
Yes. Use a blended ADR, blended commission, and weighted variable cost for the period. For higher accuracy, run separate scenarios per segment and combine results in a spreadsheet.
What if contribution margin is zero or negative?
A nonpositive margin means each occupied night fails to cover its own variable cost after discounts. Increase net pricing, reduce commission, or lower variable costs before relying on the thresholds.
Can I calculate thresholds for a week or a custom event window?
Yes. Change days in period and update fixed costs to match that timeframe. Keep all inputs aligned to the same period so the threshold and planned profit comparison remains valid.