The hotel business has one tenet that stands above all other hospitality based business standards. Get heads on beds. Why does this one business standard have so much more value than any other? Well, it is simple, the fixed cost of operations for hotels are over 70% of all costs. Therefore any additional guest sleeping in one of the rooms adds significantly to the potential profit of the hotel.
The hotel industry is one of the many segments of the hospitality industry. Due to its nature of low variable costs and high fixed costs; each additional guest staying greatly affects the cash flow and profitability.