The Cost of Goods Sold (COGS) for a hotel room refers to the direct costs of providing that room to a guest:
• Housekeeping costs include cleaning the room, laundry for the bed linens and towels, and any other housekeeping costs directly associated with preparing the room for guests.
• Amenities include the cost of toiletries provided in the room, such as soap, shampoo, conditioner, and lotion. It can also include any other amenities provided in the room, like coffee or tea, bottled water, or minibar items included in the room rate.
• Utilities include the proportional cost of electricity, heating, and cooling for the room.
The marginal cost for a hotel room is often identical to the total COGS per room. This is because most of the costs associated with providing a hotel
room are variable – they increase directly with the number of rooms sold.
More information on this concept in the whitepaper on “Profit-Oriented Revenue Management (PORM)“
