Is running a hotel profitable? From room count to monthly profit in five lines

There is no single figure. Profit comes from five lines you fill in with your own numbers: room nights sold, room revenue, other revenue, costs that move with guests, and costs that do not. Occupancy rate is the share of available room nights sold. Anyone quoting one number for "a hotel" is guessing.

You have the building, or the family has run it for thirty years, and the question is simple: how much does a hotel make? Most answers online come from a coastal resort with a different season, a different cost base and a different guest. After reading this, you will be able to build the answer for your own property from five lines, and to judge any published average against what your own records say.

Why is there no single answer to how much a hotel makes?#

Because two hotels with the same room count can post different profits, and the difference sits in five numbers any owner can write down. The average rate, the length of the season, the cost base and the share of revenue that comes from rooms all move independently. A published per-hotel or per-room average describes a population, not a property; a figure that fits a large all-inclusive resort says nothing useful about a 14-room pension.

Revenue is not profit. Profit is what remains after both cost lines, and the second cost line, the one that does not move with guests, is the one owners most often leave out. Before any arithmetic, collect three inputs: your room count, the number of nights you are actually open, and your own rate and cost figures from last year's records.

The sum is deliberately simple. Its value is that every line can be traced to a document: a reservation report, a supplier invoice, a payroll list.

Lines 1 and 2: how do you turn a room count into room revenue?#

Multiply rooms by the nights you are open by the occupancy rate to get room nights sold, then multiply by your average daily rate.

Room nights available equals rooms times nights open. A seasonal hotel open 180 nights has half the selling days of a city hotel, and that single choice changes every later line. Occupancy rate, defined once: room nights sold divided by room nights available, shown as a percentage. Average daily rate (ADR) is room revenue divided by room nights sold; it is not the rate printed on your website, and it is not the highest rate of the season. Room revenue equals room nights sold times ADR, and what matters is that both numbers come from your own records rather than from a hope.

Four common mistakes: using 365 nights for a seasonal property; using the peak rate as the average; counting complimentary, house-use or out-of-order rooms as sold; and forgetting that a group rate lowers the average even when the hotel looks full. Check the result against last year's actual room revenue, or against the rates your competitors publish, and explain any gap in writing before you believe the number. The same formulas, with their traps, are set out in RevPAR, ADR and occupancy rate: formulas and common mistakes.

Line 3: what other revenue does a hotel earn, and how much of it counts?#

Restaurant, bar, spa, parking, laundry, transfers and extras all add revenue, but only what is left after their own direct costs should reach the profit line.

List only what the property can actually sell today: restaurant and bar, minibar, spa, meeting room, parking, laundry, airport transfer, extra bed, late check-out. Separate gross from net: an extra sold through an agency or a platform may carry commission, and a tour you sell on behalf of another business is not your revenue at all, only your margin on it. Put the cost of sales against this line, not in the fixed block: food, drink, spa consumables and the staff hours that deliver them.

In an all-inclusive or board package the guest pays one price, and splitting it between room and board is an accounting decision your accountant should set, not a marketing one. For example, a 12-room pension that opens its breakfast to non-residents adds revenue, but the food cost and the extra kitchen hours decide whether it adds profit. A working rule, not a number: a revenue line that needs stock and staff to deliver is judged on its margin, never on its turnover.

Lines 4 and 5: which costs move with guests, and which do not?#

Costs that move with guests rise with every room sold; costs that do not stay whether the hotel is full or empty, and they set your break-even point.

Costs that move include cleaning and linen per stay, breakfast and minibar stock, laundry, booking commissions, accommodation tax collected on the bill, and the utilities that track occupancy. To get a cost per occupied room, add those costs for a month and divide by room nights sold; it turns a pile of invoices into one number you can compare month to month, as shown in Cost per occupied room: what each sold room costs your hotel, line by line. Costs that do not move include rent or mortgage, permanent salaries, insurance, licenses, software, marketing retainers, maintenance contracts and security.

Break-even occupancy is fixed costs divided by the contribution each sold room leaves after its variable cost. That is the occupancy rate at which the hotel stops losing money, and it is the number to argue about, not the room count. Staffing sits on both sides: housekeeping hours scale with rooms sold, the front-desk shift does not.

Your own chart of accounts decides where each item sits, so fix it with your accountant. The trap: booking a seasonal cost as fixed, or a fixed cost as variable, moves the break-even point and flatters the plan. Decide each cost once, in writing, and keep it there.

What does the sum look like for a pension, a city hotel and a resort?#

The same five lines produce very different results, and the three cases below are invented round numbers for illustration, not benchmarks.

For example only. Invented properties, round numbers, no market data.

A small pension has few rooms, a modest average rate, small other revenue, low variable costs and a fixed block dominated by building upkeep and family labour. A city hotel is open all year, with strong other revenue from the restaurant and meeting room and a heavy fixed block of rent and permanent staff. A resort has a concentrated season, a high average rate, and a variable cost per guest that is heavy because the price includes food and drink.

What actually changes the answer is the length of the season and the variable cost per guest, more than the room count. A resort can show an excellent season and a weak year once the twelve months of fixed costs are counted. Replace every number in the table with your own before you draw any conclusion; the structure is the lesson, not the figures.

What does the Ministry's published occupancy rate tell you?#

It tells you what Türkiye's certified facilities did in aggregate in 2025, which makes it a reality check on your own assumption, not a target for your property.

The headline figure is 49.54% for 2025 in İşletme- and Basit-certified facilities, against 51.91% in 2024, according to the Ministry of Culture and Tourism's 2025 annual bulletin of certified accommodation statistics (opens in a new tab). By type and class, İşletme-certified unless noted: five-star hotels 61.01%, four-star 54.00%, three-star 42.15%, two-star 38.72%, one-star 37.82%, all hotels 55.61%; boutique hotels 42.29%; pensions 35.11%; Basit-certified pensions 33.49%; apart hotels 37.86%; holiday villages 68.16%; thermal hotels 40.70%; Basit-certified hotels 41.48%.

The bulletin's column is labelled "DOLULUK ORANI (%)" and the definition is not stated in it, so treat it as a Ministry series whose basis you cannot verify, and do not read it as a room-based measure for your own property. It is an average across a year and across the country: a seasonal resort, a city hotel and a village pension are all inside the same figure. Use it as a sanity check: if your plan assumes 85% in a pension, write down why you differ from the record before you build anything on that assumption. It is not a benchmark for a single property, and it is not "hotel occupancy": certified facilities include pensions, apart hotels, holiday villages and thermal facilities, and not all of them are hotels. More detail on what the figure measures is in Türkiye occupancy rate 2025: what the Ministry's figure measures.

What does the five-line sum leave out?#

Tax, debt service, renewal and the owner's own time sit outside the five lines, and each of them can turn a positive result into a loss.

Tax: accommodation tax and value added tax apply according to your scope and your documents, and the treatment of packages differs from that of room-only sales. Do not carry a rate from an article; confirm your own case with an accountant. Debt: interest and principal fall due in the empty month as well as the full one, so a paper profit can still miss a loan instalment.

Renewal: furniture, soft goods, bathrooms and technology wear out. A reserve set aside every year is a real cost even though no invoice arrives that month. Costs arrive monthly while revenue does not, so the low season has to be funded from somewhere. And if the plan only works because the owner and the family are not paid, say that out loud before anyone signs. A new roof or a renovated lobby belongs in the year it happens, not hidden inside a good month.

A monthly template for keeping these lines is in Monthly income and expense sheet for a small hotel or pension: a template that owners keep.

What to do next#

Fill the five lines with your own figures before you believe any published average, then add tax, debt and renewal to see what the year actually leaves. The next step is small: open last year's reservation report and write line one, the room nights you actually sold.