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Revenue Management Glossary

Break Even Point (BEP) – In Unit and Revenue

Break Even Point (BEP) / Room Nights (RN)

The breakeven point (BEP) or breakeven level represents the sales amount—in either unit (quantity) or revenue (sales) terms—that is required to cover total costs, consisting of both fixed and variable costs to the company. Total profit at the breakeven point is zero.

  1. marginal return = ADR – Variable costs
  2. BEP RN = Fix costs / marginal return per RN

Break Even Point (BEP) / Revenue

  1. Marginal return quote = marginal return per RN / ADR
  2. BEP Revenue = Fix costs / marginal return per RN

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