Higher ADR vs Higher Occupancy — What are you optimizing for?

[Hemang Bhatt]

Higher ADR vs Higher Occupancy — What are you optimizing for?

Something I’ve been thinking about a lot lately while operating and managing short-term rentals in Charlotte—

Would you rather have higher ADR with lower occupancy, or lower ADR with higher occupancy?

For example:

Option A → $325/night @ ~55% occupancy

Option B → $240/night @ ~75% occupancy

On paper, these can end up pretty similar… but they feel very different to run.

• Higher ADR → fewer guests, less wear & tear, higher revenue per stay
• Higher occupancy → more consistency, but more turns, more coordination, more variability

What I’ve noticed is the answer isn’t as straightforward as “just maximize revenue.” It seems to shift based on:

• Type of market (urban vs destination)
• How the property is positioned (experience vs standard stay)
• Guest profile (groups vs couples vs business travelers)

Curious how others here approach this—

Are you intentionally pushing ADR, occupancy, or trying to balance both?

And what’s actually worked best in your market?

[Collin Hays]

This is the age-old question. Everyone has a balance they are comfortable with. But I think you have to test the market's demand by pricing for occupancy first, then adjusting, carefully, to see what you can get by with.