What is Break-even point?
The level of sales where revenue exactly covers all costs.
Below break-even a business loses money; above it, it makes a profit. For hotels it is usually expressed in rooms sold per night or as an occupancy rate.
Formula
Break-even rooms = Fixed costs ÷ (ADR − Variable cost per room)
Example
Fixed costs of $275 a day and rooms at $80 with no variable cost: $275 ÷ $80 = 3.4, so 4 rooms a night.
Why it matters
It answers the first question of any business plan: how much must we sell to survive?
Free tool
Hotel Break-Even Calculator →
Lesson
Break-Even Analysis: How Many Rooms Does a Hotel Need? →
🏨 See it in a hotel game
When you lose money, the game estimates how many more rooms you need to break even.
Play free — no download