Hotel Revenue Glossary · Metrics

Paid Occupancy

The percentage of available rooms occupied by paying guests, excluding complimentary, house-use, and other non-revenue-generating room types. Paid occupancy reflects only rooms that contribute to room revenue.

Why it matters: Paid occupancy gives a clearer picture of commercial performance than total occupancy, which can be inflated by comps and house-use rooms. It is the more accurate denominator for calculating true ADR and assessing revenue generation.

Worked example: Occupancy reads 85% on a 220-room hotel: 187 rooms occupied. Nine are complimentary and four are house use, so 174 rooms actually paid: 174 / 220 = 79.1% paid occupancy. Room revenue of A$36,540 divided by 187 gives a reported ADR of A$195.40; divided by the 174 paying rooms it is A$210. Those 13 non-revenue rooms were costing the ADR line A$14.60.

Common mistake: Benchmarking your ADR against competitors when your comps and house-use rooms are stripped out and theirs are not. Submission rules differ between properties and between PMS reports. Confirm which rooms sit in each denominator before concluding you are underpriced. A 13-room definition gap moved this hotel by A$14.60.

All glossary terms Occupancy Complimentary Room ADR (Average Daily Rate)