ADR tells you what a guest paid for a room night. CPOR tells you what it cost the hotel to deliver that night. Read them together and you see how much each sold room contributes before undistributed costs. This guide gives the formula, the choices behind it, and a fictional month.
The formula
CPOR = rooms department expenses ÷ occupied rooms
Use the same period for both. Decide whether complimentary rooms count as occupied, write the rule down and apply it every month. Otherwise the trend means nothing.
What goes in the numerator
The usual version uses rooms department expenses as your chart of accounts sets them out, for example in a USALI-style layout: rooms payroll and related costs, linen and laundry, guest supplies, cleaning supplies, commissions and reservation costs, and other rooms expenses. Some hotels also calculate a housekeeping CPOR, or a property-wide figure using all operating costs. Label the version you report. A housekeeping CPOR and a rooms department CPOR are different numbers.
Fictional example: Sample Inn
Fictional example. Sample Inn sold 870 rooms in the month. Rooms department expenses were:
| Rooms expense (fictional) | Month | Per occupied room |
|---|---|---|
| Rooms payroll and related | $10,000 | $11.49 |
| Linen and laundry | $2,300 | $2.64 |
| Guest supplies | $1,300 | $1.49 |
| Commissions and reservations | $11,998 | $13.79 |
| Other rooms expenses | $502 | $0.58 |
| Total | $26,100 | $30.00 |
CPOR is $26,100 ÷ 870 = $30.00. With an ADR of $135.00, each occupied room contributed about $105.00 before undistributed expenses.
Why CPOR rises when occupancy falls
Part of the rooms cost is fixed in the short term: management salaries, a minimum front desk schedule, some contracts. In the fictional example, assume $8,700 is fixed. The other $17,400 varies with rooms sold, or $20.00 per occupied room. If Sample Inn sells 750 rooms next month, expenses come to about $23,700 and CPOR rises to $31.60. The team's efficiency hasn't changed at all.
So report two numbers: total CPOR and variable cost per occupied room. The second is the better measure of day-to-day efficiency. It's also the figure to use in a forecast, or in a budget variance analysis with a flexed budget.
Commissions: in CPOR or in net ADR?
Travel agent and online channel commissions often sit in rooms expenses. When more business comes through those channels, CPOR goes up. Many hotels also track rate after commissions, called net ADR. Analyze commissions in one place so you don't count them twice. The net ADR formula guide shows the other side.
Setting it up in Excel
- Pull rooms expenses by line from the P&L and occupied rooms from the PMS for the same period.
- Use =total_rooms_expense/occupied_rooms for CPOR, and the same for each line.
- Flag each line fixed or variable and calculate variable cost per occupied room.
- Show the month, year to date, budget and prior year side by side.
Using CPOR well
Compare CPOR with your own budget and history before anyone else's. Published ranges from other hotels mix service levels, labor markets and definitions. Treat them as a prompt for questions, not a target. When CPOR moves, first ask whether the cost moved or the room count did.