Bed nights is one of the hospitality KPIs that measures bed occupancy as opposed to room occupancy, known as occupancy rate. In other words, it focuses on the number of beds in the hotel instead of the number of rooms.
Bed nights is calculated by dividing the number of beds occupied by the total number of beds in a hotel and multiplying the result by 100 to get the percentage.
For example, if a hotel has 10 double rooms and there were 5 single guests staying at some point, the occupancy rate (or room occupancy) would be 50 percent. However, the bed occupancy would be 25 percent since only 5 out of 20 beds were occupied.
This can be an important metric to track if your property heavily relies on ancillary revenue streams from in-house facilities (e.g., restaurant, spa, golf, gift shops, etc.). Low bed nights percentage along with high occupancy rate will mean fewer sales and less potential revenue. In this case, revenue managers can apply one of the yield management strategies (such as only accepting two-guest reservations for double rooms) to increase the bed nights ratio.