In any profitability analysis of a riad, one figure stands out above all others: the occupancy rate. Simply increasing it by a few percentage points in a spreadsheet is enough to transform an average project into a brilliant investment. That is precisely why one should be wary of it. An occupancy rate cannot be simply decreed: it must be measured, justified and built up.

Rather than giving you an «average» figure that would say nothing about your future riad, this guide explains how to calculate the occupancy rate correctly, what causes it to vary at Marrakech, how to check the occupancy rate of a riad that is for sale, and how to factor it carefully into your calculations.

In short : The occupancy rate is calculated by dividing the number of nights sold by the number of available nights. It depends mainly on the location, the property, customer reviews, pricing policy and the season. When purchasing a riad, ask for the actual booking history and cross-check it against the declarations of visitor’s tax. For a new project, base your planning on conservative assumptions and a gradual ramp-up.

Defining the occupancy rate accurately

The formula

The occupancy rate is calculated as follows: nights sold ÷ nights available, over a given period. Whilst it may seem simple at first glance, it harbours several pitfalls.

Per room or per riad? A guesthouse rented by the room is measured in room-nights. A riad rented in its entirety is measured in nights’ rental of the whole property. The two figures are not comparable.
Which nights are available? Exclude any periods when the business is closed, undergoing refurbishment or being used for personal purposes, but do make it clear: a rate calculated over six months of operation does not mean the same thing as an annual rate.
Nights sold or nights paid for? Cancellations, free stays and visits from relatives skew the statistics.

The indicators to look at with him

The average price per night (ADR): A riad that is fully booked but charging rock-bottom prices may earn less than a riad with lower occupancy but higher room rates.
Available revenue per night (RevPAR): occupancy rate × average rate. This is the most telling indicator for comparing two properties.
The average length of stay : Short stays mean more bookings, check-ins and platform fees.

Factors affecting occupancy rates at a riad at Marrakech

Seasonality

Marrakech operates in line with the European tourist seasons, school holidays, the festive season and major events. The hottest months of summer and certain quiet periods in winter fill up at different rates. The weather accounts for much of the travellers’ schedule: the mild weather of spring and autumn, the heat of summer, and the chilly winter nights in poorly heated riads. A thorough analysis therefore never stops at an annual rate: look at occupancy month by month, identify the lulls and ask yourself what the riad offers to fill them (heating, a heated swimming pool, long-stay offers, private events).

The location

proximity to a door accessible by car or taxi, for travellers arriving with their luggage; ;
within walking distance of Jemaa el-Fna Square, the souks and the major monuments; ;
the peace and quiet of the alleyway and the sense of safety in the evening.

The product

the number of rooms and their mix (double beds, twin beds, family suites); ;
a pleasant terrace, a pond or a heated swimming pool, air conditioning and heating, which are essential depending on the season; ;
the quality of the décor and the photos, which is what draws people in at first glance; ;
Services: breakfast, dinner, transfers, hammam.

Marketing

customer reviews, undoubtedly the primary lever; ;
a presence across multiple channels (platforms, direct website, agencies); ;
pricing policy: dynamic pricing, minimum stay, cancellation terms; ;
the speed of response to enquiries.

Check the occupancy rate of a riad that is for sale

When a riad is sold «as a going concern», the seller often highlights an impressive occupancy rate. Ask for proof:

Exporting bookings from the management software or platforms, covering at least two full years, including dates, number of nights and amounts.
Payment statements platforms and the corresponding bank statements.
Tourist tax returns : The operator of a tourist establishment collects this tax per person per night and reports it periodically to the local authority. These reports provide a valuable cross-check against the number of overnight stays actually reported.
Operating accounts, if the riad is run by a company.
Customer reviews online: their number and dates give an idea of the actual level of activity.

Be wary of an advertised rate without a detailed schedule, a peak season presented as the norm, or a figure that includes stays by the owner and their friends.

Estimating occupancy rates for a new development

Whether you’re planning to build a new riad or convert an existing property, you have no previous experience to draw on. Take a systematic approach:

Take a look at similar riads in the same neighbourhood, of the same size and in the same price range: availability calendars, advertised prices, frequency of reviews.
Plan for increased demand : a new establishment with no reviews attracts fewer customers in its first year.
Come up with three scenarios : conservative, central, optimistic. Your project must remain viable under the conservative scenario.
Please be aware of any closures for maintenance and for your own holidays.

The official tourism statistics published in Morocco provide a general picture of visitor numbers, but they cover all classified establishments and are no substitute for an analysis of your specific market.

Include occupancy in your profitability calculation

Once you have formulated your hypotheses, test them in our Riad profitability calculator. Vary the occupancy rate and the average price: you will immediately see how they affect your net return, and the threshold below which the project no longer covers its costs.

Bear in mind the costs that increase with occupancy: cleaning, laundry, breakfasts, platform commissions, tourist tax, and water and energy consumption. And those that remain fixed: permanent staff, maintenance, insurance and local taxes. For an overview of rental models, read our guide to’1-bedroom, 1-bathroom rental property, and for holiday lettings in particular, our article on the short-term riad rentals.

Improving your riad’s occupancy rate

look after them photos and the description, including an honest account of accessibility; ;
Strive for excellence in opinion : hospitality, cleanliness, breakfast, advice on the town; ;
adapt your price depending on the season and events, rather than a single rate; ;
expand the direct booking with your former customers; ;
suggest some low-season offers : long stays, remote working, groups, private hire.

Frequently Asked Questions

What is the average occupancy rate for a riad at Marrakech?

There is no single relevant figure: occupancy rates vary greatly depending on location, size, range of services, reviews and management. Analyse comparable riads and, for a property currently in operation, its actual performance history.

How can you check the occupancy rate quoted by a seller?

Request booking records covering the past two years, platform reports and tourist tax returns, then cross-check them against the business accounts.

Is a high occupancy rate better, or a high average price?

The best indicator is revenue per available night, which combines both figures, net of variable costs. A riad that is very full but charging low prices is not necessarily the most profitable.

How long does it take for a new riad to fill up?

Allow for a start-up period whilst you build up reviews and a customer base. Your financial plan must take this into account from the very first year.

Let’s assess the potential of a riad together

We help you analyse the track record of an existing riad and develop realistic assumptions for your project. Contact Klair & Arno.