Cost per Occupied Room
Cost per occupied room is a hotel industry metric that measures how much it costs to run a hotel. It's calculated by dividing total expenses by the number of occupied rooms.
The formula for cost per occupied room is:
Cost per Occupied Room = Total Expenses / Number of Occupied Rooms
A CPOR should reflect the cost of running a hotel, as well as its ability to make money and keep customers coming back. If you have high costs but low revenues, then your CPOR will be too high and you may need to consider raising rates or lowering costs. It's important to remember that a hotel's occupancy rate doesn't have to be 100% all the time—in fact, during slow periods it's better if it's not.
Hotels manage cost per occupied room in several ways. They can make sure they're not overbooking rooms, so they don't have empty rooms that are still being paid for. They can make sure their occupancy rate—the percentage of their available rooms that are in use—is high enough to justify their expenses. And they can try to increase their average daily rate (ADR), which is what guests pay for each night in a hotel room.
Why is CPOR Important for hoteliers?
CPOR is important for hotels because it helps them to understand their profitability.
CPOR is the cost per occupied room, which is an indication of how much it costs a hotel to accommodate a guest in a room. CPOR can be calculated by dividing the total cost of operating the hotel by the number of rooms that are used during a given period of time.
This information is useful because it allows hotels to see how much revenue they can expect from each room booked, and it also helps them to compare their costs with those of other hotels in their area.
