Question

Last month, Ginger's hotel ran an occupancy rate of 85%. Her competitive set had 150,000 room

nights included within it that were available for sale during that month. During that month, the
competitive set sold a total of 115,000 rooms. What was the approximate occupancy rate INDEX last
month for Ginger's hotel?​

Answer 1

Occupancy Index=111

Explanation:

-Occupancy rate INDEX is defined as the ratio between the percentage occupancy of your property to the percentage occupancy of the competitive set times 100%

-Given that your property's occupancy rate is 85%. The occupancy rate of the competitive set is:

`Occupancy=(Rooms \ Sold)/(Rooms \ Available)\\\\=(115000)/(150000)\\\\=0.7667\\\\=76.67\%`

-The Occupancy Index is then calculated as follows:

`INDEX=(Porperty \ OCC)/(Competitive \ OCC)* 100\\\\\=(0.85)/(0.7667)* 100\\\\=110.8647\approx 111`

Hence, the approximate occupancy index for the hotel is 111