Chartered Financial Analyst with 15+ years experience in hospitality finance and small business ownership.
Find your B&B’s breakeven occupancy. Enter any three variables—Monthly Fixed Costs, Average Room Rate, Variable Cost per Room, or Breakeven Room Nights—to solve for the fourth.
B&B Breakeven Calculator
Bed & Breakfast Breakeven Formula
The breakeven formula for a Bed & Breakfast (B&B) finds the total number of room nights (Q) you must sell in a month for your total revenue to cover all fixed and variable costs.
Q = F / (P – V)
Solve for Monthly Fixed Costs (F):
F = Q * (P – V)
Solve for Average Room Rate (P):
P = (F / Q) + V
Solve for Variable Cost per Room (V):
V = P – (F / Q)
Variables Explained
- Monthly Fixed Costs (F): Your total, recurring monthly overhead (e.g., mortgage, property taxes, insurance, salaried staff, utilities, booking system fees).
- Average Room Rate (P): Your average *revenue* per room sold, after any discounts but before commissions.
- Variable Cost per Room (V): The average cost directly tied to selling one room (e.g., breakfast food costs, cleaning supplies, laundry, OTA commissions, credit card fees).
- Breakeven Room Nights (Q): The total number of room nights you need to sell each month to reach $0 in profit.
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What is a B&B’s Breakeven Point?
A **Bed and Breakfast’s Breakeven Point** is the exact number of room nights (Q) you must sell each month to cover all of your operating costs. It is the minimum occupancy you need to achieve to stop losing money and start earning a profit. For a B&B owner, this number is critical for pricing your rooms, managing your costs, and knowing when you’re actually “in the black” for the month.
**Fixed Costs (F)** are your consistent monthly overhead, even if you have zero guests. This is primarily your mortgage, property taxes, insurance, base utilities (gas, electric, internet), and any salaried staff you employ.
**Variable Costs (V)** are costs incurred *only* when a guest stays the night. The most obvious cost for a B&B is the **breakfast** itself (food and beverage). This also includes cleaning supplies, laundry, toiletries, and any commissions paid to Online Travel Agencies (OTAs) like Airbnb or Booking.com.
The **Contribution Margin** (P – V) is the profit from a single room night that goes toward paying your fixed costs. If your average room rate is $220 (P) and your variable cost (breakfast, cleaning, fees) is $40 (V), your contribution margin is $180. This calculator finds how many $180 “profit chunks” you need to cover your total fixed costs.
How to Calculate B&B Breakeven (Example)
Let’s calculate the breakeven point for a 5-room Bed & Breakfast.
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Identify Monthly Fixed Costs (F):
Your monthly mortgage, taxes, insurance, and base utilities total $6,000.
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Identify Average Room Rate (P):
You find that across weekdays and weekends, your average collected rate per room is $220.
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Identify Variable Cost per Room (V):
You calculate that breakfast ingredients, cleaning supplies, toiletries, and average OTA commissions cost you $40 per room sold.
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Apply the Formula: Q = F / (P – V)
First, calculate the contribution margin per room: $220 (P) – $40 (V) = $180.
Next, divide the fixed costs by this margin:
Q = $6,000 / $180 = 33.33 -
Conclusion:
You must sell 34 room nights (rounding up) each month to cover all costs. In a 30-day month, your B&B has 150 available room nights (5 rooms * 30 days). Your breakeven occupancy is `34 / 150 = 22.7%`.
Frequently Asked Questions (FAQ)
If you pay yourself a regular “owner’s draw” or salary, you should absolutely include it in your **Fixed Costs (F)**. The goal is for the business to pay you, not just for you to live off the leftover profit. The breakeven point should cover your living expenses.
OTA commissions are a classic **Variable Cost (V)**. If an OTA takes a 12% commission on a $220 room, that’s $26.40 you pay *only* because you sold that room via their platform. This cost should be averaged into your (V).
Utilities are often both. You have a *base* amount of electricity, gas, and water you use even if no guests are present (this is a **Fixed Cost**). You also have an *additional* amount of utilities used by guests (laundry, hot showers, AC), which is a **Variable Cost**.
This is a great way to use the calculator. Enter your (F) (e.g., $6,000), your (V) (e.g., $40), and a *target* number of room nights (Q) you realistically think you can sell (e.g., 50). The calculator will solve for (P), telling you the minimum price you must charge to hit your goal.