How is occupancy rate calculated?

The calculation of occupancy rate is a critical metric in the hotel industry as it measures how effectively a property is filling its available room inventory. The correct formula is the one that takes the number of rooms sold and divides it by the total number of available rooms, then multiplies by 100 to express it as a percentage. This approach provides a clear view of the hotel's performance in terms of room sales relative to its total capacity.

Understanding occupancy rate is essential for hotel management as it reflects the hotel's ability to generate revenue from its available rooms. A higher occupancy rate generally indicates better performance and profitability, while a lower rate may signal issues with marketing, pricing, or demand.

In contrast, other options do not represent the correct calculation of occupancy rate. For instance, using total room revenue in a formula doesn't directly account for the number of rooms sold, thus failing to accurately reflect occupancy in terms of room availability. Similarly, calculating occupancy based on guests or inverting the standard formula significantly misrepresents hotel performance metrics. Each of these incorrect options would lead to a misunderstanding of how well a hotel is utilizing its available rooms.