What does "occupancy rate" indicate in the hotel industry?

Occupancy rate is a key performance metric in the hotel industry that reflects the percentage of available rooms that are sold during a specific time period. This measurement is critical for hotel management as it provides insight into the hotel's ability to attract guests and optimize its room inventory.

A higher occupancy rate generally indicates that the hotel is successful in filling its rooms, which contributes to overall revenue generation. It serves as a benchmark for evaluating the hotel's performance over time or compared to competitors. By understanding occupancy rates, hotel managers can make informed decisions regarding pricing, marketing strategies, and staffing levels, ultimately influencing the hotel's profitability and operational efficiency.

The other options, while relevant to overall hotel performance, do not directly address occupancy rate. Total revenue generated by the hotel relates to financial performance, the average length of guest stays pertains to guest behavior, and the total number of guests served is a measure of service capacity rather than the effectiveness of room sales.