How Room Rates Drive Occupancy:

Abstract

The occupancy rate is a key success indicator for a hotel. It reflects the extent to which rooms are sold in comparison with the total number of rooms available, measured on a daily, monthly, and annual basis. When a hotel aims to maximize room occupancy and room revenue, a well-planned marketing mix strategy is crucial, especially in terms of pricing. Setting the right price is a significant challenge for a hotel: it should not be seen as too cheap or too expensive by consumers, while still providing a profit for the company and not putting it at a disadvantage compared to competitors. Therefore, mistakes in pricing can significantly affect a hotel's occupancy rate.
 This study aims to understand the influence of room rates on occupancy at The Laguna, a Luxury Collection Resort & Spa. The data collection method in this research involves the use of secondary data about prices and occupancy rates. The data analysis techniques used include classic assumption tests, simple linear regression analysis, correlation coefficient analysis, determination coefficient analysis, and t-tests, assisted by the SPSS version 25 software program. The results of this study indicate that room pricing (X) has a significant effect on occupancy rates (Y), as evidenced by a significance value of 0.00, which is less than 0.05, and a t-value of 6.388, which is greater than the t-table value of 2.021. Based on the determination analysis results, room rates have a strong influence of 64.60% on room occupancy, while the remaining 35.40% is influenced by other factors not tested in this study, such as product, service quality, and promotion.