The Short Answer
Break-even nights equal your fixed monthly costs divided by the contribution margin per booked night. There is no universal number of nights. It depends on your nightly rate, your variable costs, and your fixed obligations such as mortgage or rent, utilities, insurance, and taxes.
The Formula
Break-even nights per month = fixed monthly costs / (average nightly rate minus variable cost per night).
Fixed costs are those you pay whether or not anyone stays. Variable costs rise with bookings, such as platform fees, supplies, and cleaning if you absorb it.
Illustrative Example Only
These numbers are made up to show the method, not to predict any property. Suppose fixed costs are 3,000 dollars a month, the average nightly rate is 250 dollars, and variable costs come to 60 dollars per booked night. The margin per night is 190 dollars. Dividing 3,000 by 190 gives about 16 nights, or roughly 53 percent occupancy in a 30 day month. Change the rate or the costs and the answer moves substantially.
Costs People Forget
- Platform host fees on every booking. See Airbnb fees for hosts.
- Lodging taxes not collected by the platform.
- Software, pricing tools, and channel manager subscriptions.
- Supplies, linens, and consumables.
- Repairs and a replacement reserve for furniture.
- Management fees, if you do not self-manage.
- Vacancy in off-season months, which can be far below your average.
What to Check
- Calculate break-even for your slowest season, not just your average.
- Compare break-even occupancy with the realistic occupancy of comparable listings in your submarket.
- Leave a wide safety cushion between break-even and expected occupancy.
- Include debt service if you financed the purchase.
Next Step
If your break-even occupancy is close to what comparable listings achieve, the deal has little margin for error. Our startup cost guide and cash-on-cash explainer help you build the rest of the model.