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CAC

CAC Calculator
Customer Acquisition Cost Calculator for Hotels

Use Prostay’s free Customer Acquisition Cost (CAC) Calculator to measure how much your hotel spends to acquire each new guest. This tool helps hospitality professionals understand marketing efficiency, compare expenses across channels, and optimize ROI.

Customer Acquisition Cost (CAC) Calculator

Use the 3:1 CLV:CAC rule of thumb for healty growth.

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Tips to reduce CAC
  • Shift budget toward high-ROI channels (e.g., direct website, returning guests).
  • Improve conversion on your booking engine with simpler checkout and clear value props.
  • Leverage loyalty, email, and remarketing to increase repeat bookings.
  • Align sales & marketing with seasonal demand using rate and promo experiments.
What is Customer Acquisition Cost in Hotels?

Customer Acquisition Cost (CAC) is the average amount your property spends on sales and marketing to attract a single new guest. It includes expenses such as paid ads, OTA commissions, travel agent fees, social media campaigns, and direct booking promotions. Tracking CAC allows hotels to benchmark performance, control costs, and align spending with revenue goals.

Enter the data to see the CAC vs CLV chart

How to Calculate Customer Acquisition Cost

The CAC formula is simple:

CAC = Total Sales & Marketing Expenses ÷ Number of New Customers Acquired

For example, if your hotel spends $15,000 on marketing in a month and gains 200 new guests, the CAC is $75 per guest.

Why is CAC Important for Hotels?

  • Financial Planning: Understand how much it costs to attract each new booking.
  • Channel Comparison: Compare OTAs, direct bookings, and travel agents to identify the most profitable channels.
  • ROI Insights: Evaluate whether guest lifetime value (CLV) justifies acquisition spending.
  • Growth Strategy: Reduce costs by focusing on high-ROI campaigns and repeat guests.

Key Factors That Influence CAC in Hotels

  1. Marketing Mix – Paid ads, SEO, social media, influencer partnerships.
  2. Distribution Channels – OTA commissions, wholesaler margins, and GDS fees.
  3. Sales Team Costs – Wages, training, and incentive structures.
  4. Technology Investments – PMS, CRM, booking engine, and analytics software.
  5. Loyalty & Retention Programs – Discounts, points, and perks aimed at repeat guests.

Each of these contributes differently depending on the property size, market positioning, and guest segment focus.

CAC vs. CLV: The Profitability Equation

CAC becomes more powerful when paired with Customer Lifetime Value (CLV). Together they show whether your acquisition strategy is sustainable. A healthy hotel business should ideally maintain a CLV:CAC ratio of 3:1 or higher. This ensures that every dollar spent on acquiring a guest generates at least three dollars in long-term revenue.

Why Choose Our Hotel Sales Software?

Our platform is the preferred choice for hotels, hostels, vacation rentals, and alternative accommodations across the globe. Experience the difference with a PMS designed for growth, efficiency, and guest satisfaction.

What is included in hotel Customer Acquisition Cost (CAC)?
CAC should include all expenses related to acquiring new guests, such as marketing campaigns (PPC, email, social), OTA and travel agent commissions, reservation transaction fees, loyalty program costs, website and booking engine expenses, and salaries of sales, marketing, and reservation staff.
What is a typical CAC percentage for hotels?
Industry data shows that total CAC often represents around 15–25% of room revenue, encompassing commissions, transaction fees, loyalty costs, and staff expenses.
How do you calculate CAC as a percentage of revenue?
You can express CAC as a percentage with the formula:CAC % = CAC ÷ Guest-Paid Revenue × 100This helps compare acquisition costs relative to revenue performance.
Why is CAC hard to measure in hotels?
Calculating CAC precisely is often difficult because costs are spread across departments, accounting records may be fragmented, and some expenses—like invisible OTA markups or internal web costs—aren’t always transparent.
What CAC ratio indicates healthy peformance?
A widely accepted benchmark is a CLV:CAC ratio of at least 3:1—meaning the lifetime value of a guest should be at least three times greater than what it costs to acquire them.