Hotel costs under control

The first episode of this series dealt with classic hotel key figures such as ADR, RevPAR, and GOP. This time, the focus is deliberately on the cost side.

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Rising energy prices, higher personnel costs, and volatile demand show that it is not revenue alone that determines a hotel's success, but how well costs are managed.

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Those who regularly analyze their hotel costs can identify potential savings early on, optimize in a targeted manner, and gain financial stability. Just a few key figures are enough to create transparency and make informed decisions.

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Here are five key cost indicators that hoteliers should keep an eye on.

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1. Personnel cost ratio in the hotel

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The personnel cost ratio shows what proportion of total sales is spent on salaries and non-wage labor costs.

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Formula:
Payroll cost ratio = Personnel costs ÷ Total revenue × 100

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Practical example:
One month generates €100,000 in sales. Personnel costs amount to €35,000.
→ Personnel cost ratio = 35%

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If this rate increases significantly without an increase in capacity utilization or service quality, it is worth taking a closer look at duty scheduling, overtime, or processes.

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Benefit in everyday life:
This key figure helps you to consider staffing levels and demand together - not just at the end of the month, but on an ongoing basis.

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2. Cost of goods sold ratio (F&B cost ratio)

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The cost of goods ratio shows what percentage of F&B sales is spent on food and beverages.

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Formula:
Cost of goods ratio = Cost of goods sold ÷ F&B sales × 100

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Practical example:
F&B cost ratio: 40.000 €
Cost of goods sold: 14.000 €
→ Ratio = 35 %

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With the rate at 30% in the previous year, these five percentage points make a significant difference to annual profitability. This may be due to higher purchase prices, larger portion sizes, or stock losses.

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Benefit in everyday life:
The key figure reveals margin changes before they accumulate unnoticed.

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3. Fixed costs per available room

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This key figure shows which fixed costs are incurred regardless of occupancy per room, such as rent, insurance, IT contracts, or base salaries.

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Formula:
Fixed costs per room = Fixed costs ÷ Number of available rooms

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Practical example:
Fixed costs per month: 50.000 €
25 rooms
→ 2.000 € Fixed costs per available room

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This figure illustrates how high the structural cost pressure on your business is—regardless of whether rooms are sold or remain empty.

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Benefit in everyday life:
It helps to specifically question fixed cost blocks and realistically assess one's own dependence on high capacity utilization.

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4. Break-even occupancy rate in hotels

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The break-even occupancy rate shows the occupancy level at which your hotel covers its fixed costs. It is based on the contribution margin per occupied room - i.e., revenue minus variable costs per room.

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Simplified calculation:
Break-even occupied rooms = fixed costs ÷ contribution margin per occupied room
Break-even occupancy = occupied rooms ÷ available rooms × 100

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Practical example:
Fixed costs per month: €50,000
Contribution margin per room night: €100
→ 500 occupied room nights required

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With 25 rooms over 30 days (750 available room nights), this corresponds to approximately 67% occupancy.

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Benefit in everyday life:
This key figure provides clarity. You know exactly at what point your business is operating profitably and when action needs to be taken.

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5. Cost per occupied room

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This figure shows what an occupied room actually costs you.

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Formula:
Cost per occupied room = total cost ÷ occupied rooms

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Practical example:
Total monthly costs: €80,000
Occupied room nights: 800
→ €100 per occupied room night

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If occupancy declines, the cost per room automatically increases, even if there is little change in the cost structure. This is precisely why this key figure is so revealing.

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Benefit in everyday life:
It helps you assess whether your prices cover your actual costs or whether your margin is under pressure.

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Cost control creates business peace of mind

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Cost optimization in hotels does not mean cutting corners everywhere. It means conscious management.

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These five key figures will help you recognize:

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• whether your personnel deployment makes economic sense
• whether your use of goods is efficient
• how high your structural fixed costs are
• at what occupancy level your hotel operates profitably
• how strongly occupancy affects your unit costs

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profitize supports you in centrally bundling your relevant financial and cost figures, presenting them transparently, and placing them in the right context.

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Instead of manually consolidating figures from PMS, POS, HR systems, or accounting in Excel, all relevant data is collected centrally. This allows you to identify trends on an ongoing basis rather than just at the end of the month.

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If personnel costs rise faster than sales or occupancy rates, it becomes apparent whether productivity per occupied room is declining. Deviations from the budget -for example, in the cost of goods or energy -are flagged early on, before they accumulate over several weeks.

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This does not result in a graveyard of numbers, but rather a clear early warning system for cost developments. And that is precisely what creates business security in everyday life.