Set a reasonable, profitable occupancy rate goal.

Let’s start by how to actually calculate your occupancy rate. The equation here is simple.

Airbnb occupancy rate = (booked nights / available nights) * 100

For any given time frame, such as last month or the last 365 days, how many days was your Airbnb available for guests to book? This will exclude any days that you intentionally blocked off the calendar yourself. That number of available nights becomes your denominator.

Then count up how many nights you actually had guests. This number of booked nights becomes your numerator. Then simply grab your phone’s handy dandy calculator, divide your booked nights by your available nights and multiply that decimal by 100 to get a percentage. That’s your occupancy rate.

For example, let’s say you’re calculating last month’s occupancy rate. Imagine you had 25 total nights open on your calendar for guests, since you had blocked off the other 5 nights for your own trip to your space. Then let’s imagine you hosted guests for 12 of those 25 nights. 12/25 = .48 * 100 = 48% occupancy rate.

Now when it comes to analyzing whether your occupancy rate is good or bad, there are two essential questions to ask yourself. The first one is: Does my occupancy rate keep up with local trends? Is it reasonable? For a big picture reference point, the average occupancy rate in the United States hovers just under 50%. But local averages can be higher or lower than that, so you’ll want to do some local research to better understand whether your rates are keeping pace with the local rates.

But then the second, and much more important, question is: Does my occupancy rate produce enough income for me? Is it profitable enough? At the end of the day, what matters most is whether your Airbnb business is meeting your personal needs. How many nights do you need to be booked to make your Airbnb worthwhile for you and your goals?

There are two ways to make more money with any given Airbnb: book more nights or raise the nightly price. As you raise your price, your occupancy rate can fall while still producing the same profit. As you fine tune this equation for your unique Airbnb, you always want to be clear-eyed about what occupancy rate you’re actually aiming for, and that goal should be both reasonable for your area and profitable for your bank account.