{"id":23266,"date":"2021-01-01T10:46:44","date_gmt":"2021-01-01T10:46:44","guid":{"rendered":"https:\/\/www.xotels.com\/uncategorized\/operating-expense-ratio"},"modified":"2025-06-18T08:06:15","modified_gmt":"2025-06-18T08:06:15","slug":"operating-expense-ratio","status":"publish","type":"post","link":"https:\/\/www.xotels.com\/en\/blog\/operating-expense-ratio","title":{"rendered":"Operating Expense Ratio"},"content":{"rendered":"

Calculation:<\/b> Operating Expense Ratio = ((Total Operating Expenses \u2013 Depreciation) \/ Gross Revenue) * 100%<\/span><\/i><\/p>\n

Ideal ratio: <\/i><\/b>below 80%<\/span><\/p>\n

What is the Definition and Importance of ‘Operating Expense Ratio’:<\/b><\/h2>\n

Using this KPI can help you evaluate whether an investment is worth your time by giving insight into how much it costs to manage\/maintain the project.<\/span><\/p>\n

How? By taking the operational cost and rental income into account you will be able to compare the ratio (ideally under 80%) to make a well-informed decision for your investment opportunity<\/a>. This step can\u00b4t be overlooked and our hotel revenue management consulting<\/a> company always recommends calculating the Operating Expense Ratio to ensure the full potential and financial health of your projects.<\/p>\n

\n
\n

Keep reading about\u00a0hotel investment KPIs<\/a>, or delve into more hotel revenue management consulting<\/a> articles, below:<\/p>\n<\/div>\n<\/div>\n<\/div>

Subscribe<\/span><\/a><\/div>
Latest Articles<\/span><\/a><\/div><\/p>\n<\/div>\n
<\/div><\/div>
<\/div>

Maximize Your
\nHotel Revenue<\/strong><\/span><\/a><\/p><\/div><\/div>

Uncover the hidden revenue potential
of your hotel or resort.<\/p><\/h3><\/div>

<\/div>
<\/span>LEARN MORE<\/span><\/a><\/div><\/div>
CONTACT US<\/span><\/a><\/div><\/div><\/div>
<\/span>LEARN MORE<\/span><\/a><\/div><\/div>
CONTACT US<\/span><\/a><\/div><\/div><\/div><\/div><\/div><\/div><\/div>\n
<\/div><\/div><\/div><\/div><\/div><\/div>\n","protected":false},"excerpt":{"rendered":"

Operating Expense Ratio<\/h1>\n

Using this KPI can help you evaluate whether an investment is worth your time by giving insight into how much it costs to manage \/ maintain the project.<\/span><\/p>\n

How?\u00a0 By taking the operational cost and rental income into account you will be able to compare the ratio (ideally under 80%) to make a well-informed decision for your <\/span>investment opportunity<\/span><\/a>. This step can\u00b4t be overlooked and our hotel revenue management consulting<\/a> company always recommends calculating the Operating Expense Ratio to ensure the full potential and financial health of your projects.<\/span><\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[197,195],"tags":[],"class_list":["post-23266","post","type-post","status-publish","format-standard","hentry","category-hotel-investment-kpis","category-blog"],"acf":[],"yoast_head":"\nWhat is Operating Expense Ratio? | KPI Definition Glossary<\/title>\n<meta name=\"description\" content=\"Use this KPI to see if a specific (hotel) investment is worth your time. See the definition, calculation and example to ensure you pick the right investment for you!\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.xotels.com\/en\/blog\/operating-expense-ratio\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What is Operating Expense Ratio? | KPI Definition Glossary\" \/>\n<meta property=\"og:description\" content=\"Use this KPI to see if a specific (hotel) investment is worth your time. See the definition, calculation and example to ensure you pick the right investment for you!\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.xotels.com\/en\/blog\/operating-expense-ratio\" \/>\n<meta property=\"og:site_name\" content=\"Xotels\" \/>\n<meta property=\"article:published_time\" content=\"2021-01-01T10:46:44+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-06-18T08:06:15+00:00\" \/>\n<meta name=\"author\" content=\"Patrick Landman\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@xotels\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Patrick Landman\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":[\"Article\",\"BlogPosting\"],\"@id\":\"https:\\\/\\\/www.xotels.com\\\/en\\\/blog\\\/operating-expense-ratio#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.xotels.com\\\/en\\\/blog\\\/operating-expense-ratio\"},\"author\":{\"name\":\"Patrick Landman\",\"@id\":\"https:\\\/\\\/www.xotels.com\\\/en\\\/#\\\/schema\\\/person\\\/f51e882bd553ae1b905fc0214cdca6f5\"},\"headline\":\"Operating Expense Ratio\",\"datePublished\":\"2021-01-01T10:46:44+00:00\",\"dateModified\":\"2025-06-18T08:06:15+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.xotels.com\\\/en\\\/blog\\\/operating-expense-ratio\"},\"wordCount\":876,\"publisher\":{\"@id\":\"https:\\\/\\\/www.xotels.com\\\/en\\\/#organization\"},\"articleSection\":[\"Hotel Investment Kpis\",\"Hotel Revenue & Management Blog\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.xotels.com\\\/en\\\/blog\\\/operating-expense-ratio\",\"url\":\"https:\\\/\\\/www.xotels.com\\\/en\\\/blog\\\/operating-expense-ratio\",\"name\":\"What is Operating Expense Ratio? | KPI Definition Glossary\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.xotels.com\\\/en\\\/#website\"},\"datePublished\":\"2021-01-01T10:46:44+00:00\",\"dateModified\":\"2025-06-18T08:06:15+00:00\",\"description\":\"Use this KPI to see if a specific (hotel) investment is worth your time. See the definition, calculation and example to ensure you pick the right investment for you!\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/www.xotels.com\\\/en\\\/blog\\\/operating-expense-ratio#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/www.xotels.com\\\/en\\\/blog\\\/operating-expense-ratio\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/www.xotels.com\\\/en\\\/blog\\\/operating-expense-ratio#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/www.xotels.com\\\/en\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Hotel Management & Operations Blog\",\"item\":\"https:\\\/\\\/www.xotels.com\\\/en\\\/hotel-management\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"Hotel Investment Kpis\",\"item\":\"https:\\\/\\\/www.xotels.com\\\/en\\\/hotel-management\\\/hotel-investment-kpis\"},{\"@type\":\"ListItem\",\"position\":4,\"name\":\"Operating Expense Ratio\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/www.xotels.com\\\/en\\\/#website\",\"url\":\"https:\\\/\\\/www.xotels.com\\\/en\\\/\",\"name\":\"Xotels\",\"description\":\"Xotels - Revenue Management Consulting\",\"publisher\":{\"@id\":\"https:\\\/\\\/www.xotels.com\\\/en\\\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/www.xotels.com\\\/en\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\\\/\\\/www.xotels.com\\\/en\\\/#organization\",\"name\":\"Xotels - Hotel Management Company\",\"url\":\"https:\\\/\\\/www.xotels.com\\\/en\\\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/www.xotels.com\\\/en\\\/#\\\/schema\\\/logo\\\/image\\\/\",\"url\":\"https:\\\/\\\/www.xotels.com\\\/wp-content\\\/uploads\\\/2022\\\/05\\\/xotels-hotel-management-company-logoOriginal-compress.webp\",\"contentUrl\":\"https:\\\/\\\/www.xotels.com\\\/wp-content\\\/uploads\\\/2022\\\/05\\\/xotels-hotel-management-company-logoOriginal-compress.webp\",\"width\":196,\"height\":65,\"caption\":\"Xotels - Hotel Management Company\"},\"image\":{\"@id\":\"https:\\\/\\\/www.xotels.com\\\/en\\\/#\\\/schema\\\/logo\\\/image\\\/\"}},{\"@type\":\"Person\",\"@id\":\"https:\\\/\\\/www.xotels.com\\\/en\\\/#\\\/schema\\\/person\\\/f51e882bd553ae1b905fc0214cdca6f5\",\"name\":\"Patrick Landman\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/f58c009011be358c80a1c2ebe59eef60c38e8685209f398d3d96192f15599fff?s=96&d=mm&r=g\",\"url\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/f58c009011be358c80a1c2ebe59eef60c38e8685209f398d3d96192f15599fff?s=96&d=mm&r=g\",\"contentUrl\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/f58c009011be358c80a1c2ebe59eef60c38e8685209f398d3d96192f15599fff?s=96&d=mm&r=g\",\"caption\":\"Patrick Landman\"},\"description\":\"As CEO and Founder of XOTELS, Patrick Landman has made it his mission to turn hotels and resorts into local market leaders. XOTELS\u00b4 diverse expertise and deep-knowledge across revenue management consulting, hotel management, and hotel consulting, enables us to drive results for independent boutique hotels, luxury resorts, and innovative lodging concepts. Below you will find opinion articles written by Patrick Landman.\",\"sameAs\":[\"https:\\\/\\\/www.xotels.com\\\/\",\"https:\\\/\\\/www.linkedin.com\\\/in\\\/xotels\\\/\",\"https:\\\/\\\/x.com\\\/xotels\"],\"url\":\"https:\\\/\\\/www.xotels.com\\\/en\\\/author\\\/patrick\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"What is Operating Expense Ratio? | KPI Definition Glossary","description":"Use this KPI to see if a specific (hotel) investment is worth your time. See the definition, calculation and example to ensure you pick the right investment for you!","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.xotels.com\/en\/blog\/operating-expense-ratio","og_locale":"en_US","og_type":"article","og_title":"What is Operating Expense Ratio? | KPI Definition Glossary","og_description":"Use this KPI to see if a specific (hotel) investment is worth your time. See the definition, calculation and example to ensure you pick the right investment for you!","og_url":"https:\/\/www.xotels.com\/en\/blog\/operating-expense-ratio","og_site_name":"Xotels","article_published_time":"2021-01-01T10:46:44+00:00","article_modified_time":"2025-06-18T08:06:15+00:00","author":"Patrick Landman","twitter_card":"summary_large_image","twitter_creator":"@xotels","twitter_misc":{"Written by":"Patrick Landman","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":["Article","BlogPosting"],"@id":"https:\/\/www.xotels.com\/en\/blog\/operating-expense-ratio#article","isPartOf":{"@id":"https:\/\/www.xotels.com\/en\/blog\/operating-expense-ratio"},"author":{"name":"Patrick Landman","@id":"https:\/\/www.xotels.com\/en\/#\/schema\/person\/f51e882bd553ae1b905fc0214cdca6f5"},"headline":"Operating Expense Ratio","datePublished":"2021-01-01T10:46:44+00:00","dateModified":"2025-06-18T08:06:15+00:00","mainEntityOfPage":{"@id":"https:\/\/www.xotels.com\/en\/blog\/operating-expense-ratio"},"wordCount":876,"publisher":{"@id":"https:\/\/www.xotels.com\/en\/#organization"},"articleSection":["Hotel Investment Kpis","Hotel Revenue & Management Blog"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/www.xotels.com\/en\/blog\/operating-expense-ratio","url":"https:\/\/www.xotels.com\/en\/blog\/operating-expense-ratio","name":"What is Operating Expense Ratio? | KPI Definition Glossary","isPartOf":{"@id":"https:\/\/www.xotels.com\/en\/#website"},"datePublished":"2021-01-01T10:46:44+00:00","dateModified":"2025-06-18T08:06:15+00:00","description":"Use this KPI to see if a specific (hotel) investment is worth your time. See the definition, calculation and example to ensure you pick the right investment for you!","breadcrumb":{"@id":"https:\/\/www.xotels.com\/en\/blog\/operating-expense-ratio#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.xotels.com\/en\/blog\/operating-expense-ratio"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.xotels.com\/en\/blog\/operating-expense-ratio#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.xotels.com\/en"},{"@type":"ListItem","position":2,"name":"Hotel Management & Operations Blog","item":"https:\/\/www.xotels.com\/en\/hotel-management"},{"@type":"ListItem","position":3,"name":"Hotel Investment Kpis","item":"https:\/\/www.xotels.com\/en\/hotel-management\/hotel-investment-kpis"},{"@type":"ListItem","position":4,"name":"Operating Expense Ratio"}]},{"@type":"WebSite","@id":"https:\/\/www.xotels.com\/en\/#website","url":"https:\/\/www.xotels.com\/en\/","name":"Xotels","description":"Xotels - Revenue Management Consulting","publisher":{"@id":"https:\/\/www.xotels.com\/en\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.xotels.com\/en\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/www.xotels.com\/en\/#organization","name":"Xotels - Hotel Management Company","url":"https:\/\/www.xotels.com\/en\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.xotels.com\/en\/#\/schema\/logo\/image\/","url":"https:\/\/www.xotels.com\/wp-content\/uploads\/2022\/05\/xotels-hotel-management-company-logoOriginal-compress.webp","contentUrl":"https:\/\/www.xotels.com\/wp-content\/uploads\/2022\/05\/xotels-hotel-management-company-logoOriginal-compress.webp","width":196,"height":65,"caption":"Xotels - Hotel Management Company"},"image":{"@id":"https:\/\/www.xotels.com\/en\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/www.xotels.com\/en\/#\/schema\/person\/f51e882bd553ae1b905fc0214cdca6f5","name":"Patrick Landman","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/f58c009011be358c80a1c2ebe59eef60c38e8685209f398d3d96192f15599fff?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/f58c009011be358c80a1c2ebe59eef60c38e8685209f398d3d96192f15599fff?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/f58c009011be358c80a1c2ebe59eef60c38e8685209f398d3d96192f15599fff?s=96&d=mm&r=g","caption":"Patrick Landman"},"description":"As CEO and Founder of XOTELS, Patrick Landman has made it his mission to turn hotels and resorts into local market leaders. XOTELS\u00b4 diverse expertise and deep-knowledge across revenue management consulting, hotel management, and hotel consulting, enables us to drive results for independent boutique hotels, luxury resorts, and innovative lodging concepts. Below you will find opinion articles written by Patrick Landman.","sameAs":["https:\/\/www.xotels.com\/","https:\/\/www.linkedin.com\/in\/xotels\/","https:\/\/x.com\/xotels"],"url":"https:\/\/www.xotels.com\/en\/author\/patrick"}]}},"_links":{"self":[{"href":"https:\/\/www.xotels.com\/en\/wp-json\/wp\/v2\/posts\/23266","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.xotels.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.xotels.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.xotels.com\/en\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.xotels.com\/en\/wp-json\/wp\/v2\/comments?post=23266"}],"version-history":[{"count":0,"href":"https:\/\/www.xotels.com\/en\/wp-json\/wp\/v2\/posts\/23266\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.xotels.com\/en\/wp-json\/wp\/v2\/media?parent=23266"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.xotels.com\/en\/wp-json\/wp\/v2\/categories?post=23266"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.xotels.com\/en\/wp-json\/wp\/v2\/tags?post=23266"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}