Platform Terms · Basic level · 3 min read ·
What is a project's total revenue?
Total revenue is all the money a project's operation generated in a period, before deducting any cost or expense. For a lodging asset it includes stays, rent and services. It is the first line of a financial report and the starting point for calculating profit.
In 30 seconds
- It is everything the operation billed in the period, before costs and expenses.
- It depends on how much was sold and at what price: occupancy and rate.
- It is the starting point, not the result: profit comes after subtracting.
Why should you care?
Revenue is the quickest signal of how an operation is doing: it shows whether the asset is selling.
- You see whether demand for the asset is growing, holding or falling.
- You recognize the high and low seasons of a lodging business.
- You know where to start reading a financial report.
Think of it as a cash register
At the end of the day, a shop's cash register shows how much was sold. It doesn't show how much was left, because the stock, the rent and the wages still have to be paid. Total revenue is that register figure: necessary, but not enough.
How does total revenue work?
- 1
Identify the sources
In lodging, stays; in other models, rent or services.
- 2
Look at the two levers
How many nights or spaces were sold (occupancy) and at what price (rate).
- 3
Add up the period
Everything billed in the month or year, before deducting costs.
- 4
Move on to profit
Subtract costs and expenses to see how much was left.
The formula
Revenue from stays = Nights sold × Average nightly rate
- Nights sold
- = available nights × occupancy
- Average rate
- = what was charged per night on average
An example with numbers
Illustrative figures for a short-stay apartment over a 30-night month, unrelated to any project.
| Available nights | 30 |
|---|---|
| Occupancy | 70% |
| Nights sold | 21 |
| Average nightly rate | 250,000 pesos |
| Revenue from stays | 5,250,000 pesos |
Raising occupancy or the rate moves revenue. How much of it remains depends on the month's costs and expenses.
Where do you see it at Circular Urban?
On the sheet of projects already operating, the "How the operation is going" section shows the year's total revenue. In your portfolio, each participation's detail shows it month by month, along with its composition.
- The sheet of projects already operating, in "How the operation is going".
- Your portfolio, in each participation's detail: Total Income and Income Composition.
What changes in your finances once you get it
You read the first line with judgment
You know high revenue is a good sign, not a result.
You recognize the seasons
A weak month in low season is part of the pattern, not necessarily a problem.
You understand the levers
Occupancy and rate explain almost everything that happens to a lodging business's revenue.
Common mistakes
- Myth
Total revenue and profit are the same thing.
- In reality
Revenue is what came in; profit is what remained after costs and expenses.
- Myth
Higher occupancy always means more revenue.
- In reality
If the rate drops more than occupancy rises, revenue can fall.
- Myth
A low-revenue month means something is wrong.
- In reality
Lodging has seasons. Compare equivalent months, not consecutive ones.
Test yourself
An apartment sold 20 nights in the month at an average rate of 200,000 pesos. What was its revenue from stays?
Keep learning
Helps to know first
What comes next
This content is educational. Every participation carries risks inherent to the project, including the possibility of partial or total loss, and results are subject to each project's actual performance.
