Most owners of a holiday let know roughly how busy they are. Far fewer know whether they are actually making money on each night, where profit is leaking, or which part of the business is growing. Key performance indicators, or KPIs, answer those questions in a few numbers you can check every month.
This guide covers the 7 KPIs that matter most for a holiday let, how to calculate each one, and what to do when a number moves the wrong way.
Why KPIs matter more than turnover
Turnover tells you how much came in. It does not tell you whether prices cover costs, whether time is being used well, or whether cash will be there next month. A holiday let can grow turnover and still make less profit if costs grow faster. KPIs show you the drivers behind the result, early enough to act.
The 7 KPIs for a holiday let
1. Nights booked
How to calculate it: Nights sold in the month
Your volume.
2. Occupancy rate
How to calculate it: Nights booked ÷ nights available
Shows how full the property is.
3. Average nightly rate
How to calculate it: Revenue ÷ nights
Rises with seasonal pricing.
4. Running cost % of revenue
How to calculate it: Running costs ÷ revenue
Catches rising cleaning and utility costs.
5. Platform fees % of revenue
How to calculate it: Platform fees ÷ revenue
Shows the value of direct bookings.
6. Revenue per available night
How to calculate it: Revenue ÷ nights available
Combines price and occupancy in one number.
7. Review score
How to calculate it: Average guest rating
Drives future bookings.
Interpreting these measures in practice
Review occupancy and average daily rate by month, weekday and season rather than relying on one annual average. Compare gross booking value with what remains after platform fees, cleaning, laundry and discounts. Track cancellations, review scores, repeat bookings and maintenance downtime together: a discount may fill nights but not improve contribution. Reconcile booking-platform payouts to bank receipts and keep tax, finance and repair reserves visible in the cash review.
Start with the profit basics
Alongside the industry KPIs above, every owner should check four headline figures each month:
- Total income for the month and year to date
- Total costs, split into direct costs and overheads
- Net profit and operating margin
- Lowest cash balance in the next 12 weeks, from a cash flow forecast
If net profit is falling while turnover rises, look at the cost KPIs first. If cash is tight while profit looks fine, look at unpaid invoices.
An example month (illustrative figures)
Say a holiday let takes £6,300 in a month and spends £1,900 on the direct costs of delivering the work. Gross profit is £4,400, a gross margin of 70%. If last month the margin was several points higher on similar turnover, something has changed in prices, costs or the mix of work, and the KPIs above show where to look. These figures are illustrations only: use your own.
What to do when the numbers slip
- Seasonal pricing for peak weeks and events
- Minimum stays and cleaning fees
- More direct bookings to cut platform fees
- Repeat guests and good reviews
Pick one action at a time, so you can see what made the difference. If you are asking what the business could pay you, read how much a holiday let owner earns in the UK.
How to review your KPIs every month
1. Update your records for the month: nights, sales, costs and invoices. 2. Compare each KPI with last month and the same month last year, so seasonal swings do not mislead you. 3. Pick the one number that moved most in the wrong direction and find out why. 4. Decide one action for next month, such as a price change, a rota change or chasing a debtor. 5. Check the result at the next review.
Fifteen minutes a month on this routine is enough to catch most problems while they are still small.
Common mistakes with KPIs
Tracking too many numbers. Pick the handful that drive your profit and review them consistently.
Looking at one month in isolation. Trends matter more than single results.
Not acting on what you find. A KPI that never changes a decision is just a number.
Keeping figures in your head. Write them down, or let a spreadsheet calculate them, so nothing is guessed.
Run the numbers on your own business
The **Holiday Let & Airbnb Host Management System** tracks every night, cost, invoice and VAT return, and works out your profit, margin and key figures automatically on a one-page dashboard. It costs £15 once, with no subscription. For the full start-up walkthrough, read our guide on how to start a holiday let.
Frequently asked questions
What is the most important KPI for a holiday let? Gross margin, because it shows whether your prices cover the direct cost of each night. If it is wrong, growth only makes things worse.
Which KPIs should a new holiday let track first? Start with nights booked, occupancy rate and average nightly rate. They are quick to work out and show straight away whether your pricing and capacity are right.
Can KPIs help me set prices? Yes. If your margin or rate per night is below target, your prices are too low for your costs, however busy you are.
What is a good gross margin for a holiday let? There is no single benchmark, because margins depend on your mix of work, location and whether you pay staff. The useful test is your own trend: a margin that holds steady or rises as you grow is healthy, and a falling one needs action on price or costs.
How often should I check my KPIs? Monthly for most figures, and weekly for cash and unpaid invoices.
Do I need software to track KPIs? No. A spreadsheet that calculates the figures from your records works well for most small businesses and avoids monthly fees.