So now let's look at some of the traditional performance matrices that we can use to evaluate performance. These performance matrices are not 100% foolproof and optimized yet so we're going to be learning more modern matrices that we are nowadays using in modern put and management. The first one and the most easiest and most traditional one is occupancy percentage. How we calculate that we calculate that by by assessing the payer occupied two lights divided by the available room price. Now, paid occupied room lights means only the one for which the guest is paying if you are entertaining any guests to stay in the hotel for free. House use staff use those are not considered as occupied room lights in our in the definition of universal uniform system of accounting for the hotel industries.

So occupancy percentage will mean Only when the guest is paying for it. So, technically if one hotel a one staff is staying in a hotel, you will never be able to achieve 100% occupancy available room nicely. The rooms which are available for selling on a day to day basis. However, if let's say one room is out of order for a toilet basin issue or for leaking issue which is expected to be resolved in one or two days, three days four days, that rule is not taken out of inventory to deduct from available to match that rule will still be set will be considered as available two nights because you will be if you are able to repair that room quickly and make it available for sale. We take out the rooms from the available room lights only when we are putting them for a long term renovation.

So how we allow the what is what this occupancy percentage is It allows us to compare the utilization of available tools and all the hotel performance in the most simple terms, when you are comparing hotels with a different sized hotel, you will not be able to come you will not be able to compare if one hotel has hundred rooms and another hotel has 1000 rooms. So, if both rooms are built photos are occupied hundred hundred rooms. So, one hotel is hundred percent occupancy another hotel is only 10% occupancy. So, in order to compare the utilization ratio of between different hotels, we use this simple term occupancy percentage. However, occupancy percentage or occupancy occupied room nights are affected by the prices and is inversely related to the price the higher the price lower occupancy is subject to certain restrictions and lower the price will be the higher the occupancy However, there are certain constraints in the prices.

So the all the hotels are not offered This price elasticity. So, dropping the price does not necessarily mean that we will be able to gain a higher occupancy percentage it just drop out increasing the price will also does not mean that we may lose occupancy. So, it depends on the price elasticity by a particular segment particular market particular season. There are many different ways of adjusting the price without affecting the occupancies or even if you are adjusting the price it does not mean that occupancy will increase or decrease automatically