What is the formula for labour cost per occupied room?
Labour cost = gross pay + employer on-costs + agency and outsourced labour
Labour cost per occupied room = labour cost ÷ occupied room nights
Both numbers must cover the same period and the same staff. If the labour cost is for housekeeping only, the result is housekeeping labour cost per occupied room. That is a useful number, but a different one from the whole-hotel figure.
Three related figures are worth reading next to it. Labour cost per available room (LCPAR) divides by every room night you could have sold, so it doesn’t move with occupancy. Labour cost as a percentage of revenue shows the share of what you earned that went on labour. Cost per occupied room (CPOR) adds linen, laundry, amenities and cleaning supplies to labour.
What counts as labour cost?
- Gross pay for the period: wages and salaries, overtime, night and Sunday supplements, holiday pay, and bonuses that belong to the period.
- Employer on-costs: the employer’s share of social security and pension, accident insurance, and in Italy the TFR accrual. Your payroll provider can give you the total or a percentage.
- Agency and outsourced labour: agency shifts, and contractors paid per room or per hour (for example an outsourced housekeeping team). Count it in the month the work was done, not the month the invoice was paid.
Leave out guest tips that you pass on to staff: guests paid them, not the hotel. Recruitment, training courses and uniforms usually sit in other cost lines. Whatever you decide, write it down and keep it the same every month, or the trend will move for reasons that have nothing to do with the work.
What counts as an occupied room night?
One room occupied for one night. A guest who stays three nights is three occupied room nights. Your PMS shows the total in its occupancy or night audit report as rooms sold or room nights.
- Complimentary rooms: they need cleaning like any other, so the calculator counts them as occupied by default. Switch that off if your reports leave them out.
- House use (a room used by staff or a manager): usually left out, because nobody sold it.
- Day use: decide once whether a day-use room counts, and keep it that way.
- Out-of-order rooms: not occupied, and not available either, so leave them out of available room nights.
Should I use the whole hotel or one department?
Both, for different questions. The whole-hotel figure answers “what does one stay-night cost us in people?”. It is the figure an owner asks for. The rooms division or housekeeping figure is the one a head of housekeeping can act on, because nearly all of that work scales with occupied rooms.
Food and beverage is different. Restaurant and bar staff also serve outside guests, events and covers that have nothing to do with rooms, so dividing F&B labour by occupied rooms gives a cross-department ratio, not an F&B measure. Use covers or F&B revenue for F&B.
What does a worked example look like?
An invented 72-room hotel, 30 nights in the month, 78% occupancy. An illustration, not a benchmark.
| Step | Working |
|---|---|
| Available room nights | 72 rooms × 30 nights = 2,160 |
| Occupied room nights | 2,160 × 78% = 1,685 (rounded) |
| Gross pay | €52,000 |
| Employer on-costs | 25% of €52,000 = €13,000 |
| Agency and outsourced labour | €4,300 |
| Labour cost | €52,000 + €13,000 + €4,300 = €69,300 |
| Labour cost per occupied room | €69,300 ÷ 1,685 = €41.13 |
| Labour cost per available room | €69,300 ÷ 2,160 = €32.08 |
What is a good labour cost per occupied room?
We don’t publish one. We haven’t found a sourced, current benchmark for hotels in Germany, Austria, Switzerland or Italy, and a number without a source would be a guess dressed up as a fact.
It also varies for good reasons: pay rates and on-costs by country, service level, whether stayovers are cleaned daily or on request, whether laundry is outsourced, whether breakfast staff are in scope, and the season.
The useful comparison is your own hotel, month by month, with the same definition. Read it next to occupancy: when occupancy falls, the figure rises even if nothing changed, because front desk, night cover and management are there whether 30 or 70 rooms are occupied.
How do I use it to plan next week’s labour?
Turn the formula round. Pick a target labour cost per occupied room, multiply by next week’s forecast occupied room nights, and you have a labour budget. Divide the budget by your average loaded hourly cost and you have the hours you can roster.
€38 × 390 forecast occupied room nights = €14,820 labour budget
€14,820 ÷ €24 loaded hourly cost = 617.5 hours
617.5 hours ÷ 7 days = 88.2 hours a day
This is where most of the money is. A month-end figure tells you what happened. A budget set from the forecast on Thursday changes next week’s rota before anyone works it.
What are the common mistakes?
- Mixing periods: payroll for 21st to 20th, occupancy for the calendar month.
- Leaving out on-costs, which makes one country’s figure look far lower than another’s.
- Counting agency invoices when they are paid, so one month doubles and the next is empty.
- Comparing your whole-hotel figure with another hotel’s housekeeping-only figure.
- Changing what counts halfway through the year without restating the earlier months.
We don’t show industry averages because we haven’t found a sourced, current one for your country. Your own trend is the useful comparison.
Questions
How do you calculate labour cost per occupied room?
Add gross pay, employer on-costs and agency labour for the period, then divide by the occupied room nights in the same period. €69,300 ÷ 1,685 occupied room nights = €41.13.
Is labour cost per occupied room the same as CPOR?
No. Cost per occupied room (CPOR) usually includes other rooms costs too, such as linen, laundry, amenities and cleaning supplies. Labour cost per occupied room is the labour part only.
Should complimentary rooms count as occupied?
Usually yes, because they need the same cleaning and service. The calculator counts them by default and lets you switch that off. Keep the same choice every month.
Why doesn’t this page show an industry average?
We haven’t found a sourced, current benchmark for hotels in our markets. We will show one only with a named source, year, sample and region.
Is my data sent anywhere?
No. The calculator runs in your browser. It sends nothing and stores nothing. A copied link carries the numbers after the #, which browsers never send to a server.