How to calculate break-even occupancy for a short-term rental

Break-even occupancy equals annual fixed costs divided by available nights times contribution per booked night. Contribution must include the nightly share of stay-level revenue and costs, so average length of stay belongs in the formula whenever cleaning fees or turnover expenses occur once per reservation.

Short-term rental calculation comparing 55 percent occupancy with a 56.04 percent break-even rate.

Use the formula

Gross per booked night: Nightly rate + Cleaning fee / Average stay
Contribution per booked night: Gross x (1 - Percentage costs) - Per-night costs - Turnover costs / Average stay
Break-even occupancy: Fixed annual costs / (Available nights x Contribution per booked night)

Worked example

The verified property charges $225 per night and a $125 cleaning fee, with a 4.42-night average stay. Fixed annual costs are $31,560.

Line	Result	Meaning
Nightly rate	$225	Chosen input
Average stay	4.42 nights	Controls annual turnover count
Fixed annual cost	$31,560	Runs whether occupied or empty
Per-night cost	$19	Costs that scale with booked nights
Per-turnover cost	$180	Costs that scale with stays
Percentage cost	15.5%	Applied to booking revenue in the example
Break-even occupancy	56.04%	The occupancy where modeled annual net reaches zero

Repeatable method

Use available nights after owner blocks, not automatically 365.
Enter nightly revenue and once-per-stay fees separately.
Split costs by fixed, booked night, turnover, and percentage base.
Use actual average stay length from your reservation history when available.
Recalculate after platform fee, cleaner price, rate, or occupancy changes.

Questions and answers

Why can a longer average stay lower break-even occupancy?: Once-per-stay costs are spread over more booked nights, so contribution per booked night rises if other inputs stay unchanged.
Should the guest cleaning fee cancel the cleaner cost?: Not automatically. They can have different amounts and fee treatment. Model each line on its actual base.
What if break-even is above 100 percent?: The current price and cost model is infeasible through occupancy alone. A real input must change.

Sources

Airbnb: Service feesCurrent fee structures and the booking subtotal used for host service fees.
U.S. Small Business Administration: Break-even pointThe fixed-cost and contribution-margin structure of break-even analysis.

This guide is general calculation information, not investment, tax, legal, insurance, lending, or hospitality advice. Verify platform fees and local obligations.