Question

How to compute labor cost when given labor rate, number of rooms, occupancy %.

Please a provide a formula and an example if possible?? Just basic accounting with a hospitality twist here.

Answer 1

Occupancy Rate is the ratio of rented or used space or room occupied to the total amount of available space/room.

Example:

A hotel has 200 room and has a 75% occupancy rate

Labor Rate is $200 per room

Then Labor Cost = Number of Rooms x Occupancy Rate x Labor Rate per Room

= 200 Rooms x 75% Rate x $200

= $30,000

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