GLOSSARY / CPOR (Cost per Occupied Room)

CPOR (Cost per Occupied Room)

CPOR (Cost per Occupied Room) is an important key performance indicator (KPI) in the hospitality industry, used to assess a hotel's operational efficiency and profitability. It reflects the average cost the hotel incurs for each room that is occupied by a guest.

What is the CPOR (Cost per Occupied Room)?

CPOR (Cost per Occupied Room) is a key metric in the hotel industry that measures the average cost of running a hotel room for one night. It is calculated by dividing the hotel’s total operating expenses by the number of rooms occupied. This metric is crucial for hotel managers as it provides insights into the hotel's profitability. A high CPOR may suggest excessive spending on operational costs, while a low CPOR indicates that the hotel is managing its expenses efficiently. Hotel managers can use CPOR to make strategic decisions about hotel operations. For instance, they might choose to raise room rates or cut operating expenses to reduce CPOR.

CPOR is just one of several key metrics used to evaluate a hotel's performance. Other essential metrics include:

• Average Daily Rate (ADR): The average rate paid for a room per night.


• Revenue per Available Room (RevPAR): The total revenue generated per available room each night.


• Gross Operating Profit (GOP): The total profit a hotel earns after accounting for operating expenses.

What Affects CPOR (Cost per Occupied Room)?

Several factors influence CPOR (Cost per Occupied Room), including:

• Hotel Size: Larger hotels tend to have lower CPORs as they can distribute operating costs across a greater number of rooms.


• Hotel Location: Hotels in popular tourist destinations often have higher CPORs compared to those in less frequented areas.


• Hotel Amenities: Properties offering more amenities, such as pools, fitness centers, and restaurants, generally have higher CPORs than those with fewer amenities.


• Hotel Occupancy Rate: Hotels with higher occupancy rates typically experience lower CPORs than those with lower occupancy rates.

How Do You Calculate CPOR (Cost per Occupied Room)?

To calculate CPOR (Cost per Occupied Room), divide the total cost of running the hotel by the number of rooms that were used. This includes expenses like salaries, utilities, repairs, marketing, and other costs.

Here's the formula:
CPOR = Total Operating Expenses / Total Occupied Rooms

To calculate CPOR, you need to include:

• Employee costs: Salaries and benefits


• Utilities: Electricity, water, gas


• Maintenance: Repairs and upkeep


• Marketing: Advertising and promotion


• Administrative costs: General expenses


• Property taxes and insurance: Advertising and promotion


• Interest: Money paid on loans

Once you have the total expenses, divide them by the number of occupied rooms to find the CPOR.
FAQs About CPOR

Q: How do you calculate hours per occupied room?:
A: Divide the total hours worked by the number of rooms that were used. This helps measure how efficiently staff is used compared to how many rooms are occupied.

Q: What is a CPOR budget?:
A: A CPOR budget is the planned or target cost per occupied room for a specific period. It's based on past data, expected occupancy, and estimated expenses.

Q: Do hotels charge per room or per person?:
A: Hotels usually charge per room. But they might charge extra for more guests than the room is designed for, and prices can vary based on how many people are staying.