Revenue Management
CPOR — Cost Per Occupied Room
The variable cost of servicing one occupied room — the hurdle every incremental booking must clear.
Academic definition
Cost Per Occupied Room (CPOR) measures the average variable cost incurred to service one occupied room, calculated by dividing total rooms departmental cost by the number of rooms sold. The costs included are those that vary with occupancy: housekeeping labour and supplies, energy and utilities, in-room amenities, laundry, and guest consumables. CPOR is a core operating metric in the rooms department, used to understand cost efficiency and to set rate floors below which incremental business erodes contribution. Because it is expressed per occupied room, it can be compared directly against the rate achieved on a booking to assess whether that booking covers its own servicing cost. CPOR excludes fixed costs such as salaried management, rent, and depreciation, which do not vary with each additional room sold, so it represents marginal servicing cost rather than the fully loaded cost of a room.
Total Rooms Departmental Cost = housekeeping, energy, amenities and other variable rooms cost · Rooms Sold = occupied rooms
Worked example
Rooms departmental cost of ₹9,45,000 over 1,125 rooms sold gives CPOR = ₹9,45,000 ÷ 1,125 = ₹840. Any booking below ₹840 plus its channel cost loses money on arrival.
The ProfitPAR™ lens
CPOR is the floor beneath the floor — the line a booking must clear before it contributes anything at all. Most pricing conversations obsess over the ceiling, the rate, and ignore this hard lower bound. A ₹3,200 booking looks healthy until you stack CPOR, an 18% commission, and a free-breakfast giveaway against it and discover the room paid you to occupy it. ProfitPAR™ builds CPOR straight into the calculation as one of the six leaks, so every potential booking is judged against what it actually costs to deliver. Know your CPOR and the rate floor stops being a guess — it becomes arithmetic the moment a request arrives.
If the rate does not clear CPOR plus its leaks, you are paying the guest to stay.
Measure what each room actually keeps.
ProfitPAR is offered as a private revenue practice, by invitation. Tell us about your hotel to begin.
Request an InvitationWorked examples use illustrative figures in Indian Rupee (₹) with lakh/crore conventions. They are composite and representative, not drawn from any single property. ProfitPAR™ is a trademark of Sibasish Misra.