What is break-even occupancy?
Break-even occupancy is the occupancy rate at which revenue exactly covers all operating costs (and debt service, if included).
Formula
Break-even = (fixed costs ÷ (ADR × (1 − variable cost %))) ÷ 365 × 100
Example
€4,500 fixed costs, €135 ADR, 25% variable: 4,500 ÷ 101.25 = 44 nights → 12% occupancy to cover operations.
Why it matters
The gap between market occupancy and break-even is your safety margin against a bad season or a new regulation.
Frequently asked questions
What is a safe margin?
Market occupancy at least 20 points above break-even including debt service is a common rule of thumb.
Does Terrivio include the mortgage in break-even?
Yes — the report's break-even covers operating costs plus annual debt service.