Calculate the Break-Even Point of your Accommodation
Posted: Thu Dec 05, 2024 10:48 am
Andres Romero
CEO and Project Manager
July 21, 2020
Calculating your accommodation's break-even point or Break Event Point is key when deciding something as basic as opening or keeping our accommodation closed. Taking out the calculator and looking around can help you minimize risks and make informed decisions. At Asiri Marketing we help you to carry out this small exercise and become aware of the advantages of taking realistic measures.
Today we are moving away from pure marketing to a more accounting aspect, which is much more important at this time than running a Facebook Ads campaign or improving the SEO of your accommodation . This decision takes priority over any other when deciding the short-term future of our accommodation . Surely during kazakhstan email list these days you will have questions like: How can I know when is the right time to resume activity in my accommodation? At what prices should I go on the market? How is the current situation affecting demand? When calculating the break-even point (BEP) of an accommodation, the Managers or those responsible for the accommodation must determine when is the optimal time to reopen the accommodation . It may even be better to remain closed until adequate occupancy levels can be reached to maintain the business structure.
Analyzing the cost structure of any accommodation model is the biggest challenge that accommodation faces. As is well known, accommodation expenses have a component that is fixed and another that varies depending on the occupancy and use of the establishment itself . Both will be key to calculating the break-even point. Fixed costs will be difficult to cover or reduce during a temporary closure, while variable costs will be reduced in line with operations. The closure situation of the accommodation allows us to evaluate fixed costs and variable costs very well, so that we have them perfectly measured.
Let's not get upset, the break-even point is not the panacea for the problems of an accommodation, especially when the historical data loses value when reality is not representative of the past. On the other hand, it is an obligatory exercise of analysis to become aware of the needs of the accommodation and its evolution over time . We need to project ourselves into the future and restructure ourselves in the face of a situation of uncertainty such as the one we are currently experiencing.
These are the most important factors that need to be taken into account when calculating the break-even point:
CEO and Project Manager
July 21, 2020
Calculating your accommodation's break-even point or Break Event Point is key when deciding something as basic as opening or keeping our accommodation closed. Taking out the calculator and looking around can help you minimize risks and make informed decisions. At Asiri Marketing we help you to carry out this small exercise and become aware of the advantages of taking realistic measures.
Today we are moving away from pure marketing to a more accounting aspect, which is much more important at this time than running a Facebook Ads campaign or improving the SEO of your accommodation . This decision takes priority over any other when deciding the short-term future of our accommodation . Surely during kazakhstan email list these days you will have questions like: How can I know when is the right time to resume activity in my accommodation? At what prices should I go on the market? How is the current situation affecting demand? When calculating the break-even point (BEP) of an accommodation, the Managers or those responsible for the accommodation must determine when is the optimal time to reopen the accommodation . It may even be better to remain closed until adequate occupancy levels can be reached to maintain the business structure.
Analyzing the cost structure of any accommodation model is the biggest challenge that accommodation faces. As is well known, accommodation expenses have a component that is fixed and another that varies depending on the occupancy and use of the establishment itself . Both will be key to calculating the break-even point. Fixed costs will be difficult to cover or reduce during a temporary closure, while variable costs will be reduced in line with operations. The closure situation of the accommodation allows us to evaluate fixed costs and variable costs very well, so that we have them perfectly measured.
Let's not get upset, the break-even point is not the panacea for the problems of an accommodation, especially when the historical data loses value when reality is not representative of the past. On the other hand, it is an obligatory exercise of analysis to become aware of the needs of the accommodation and its evolution over time . We need to project ourselves into the future and restructure ourselves in the face of a situation of uncertainty such as the one we are currently experiencing.
These are the most important factors that need to be taken into account when calculating the break-even point: