Occupancy rate

The proportion of available capacity actually in use. For a hospital it is beds occupied; for a hotel it is rooms sold.

A 1,800-bed hospital chain at 68% occupancy runs 1,224 occupied beds.

Both industries carry heavy fixed costs, so the marginal economics above the break-even occupancy are extraordinary and the economics below it are brutal. That asymmetry is why these businesses swing so hard with the cycle.

The maturity profile matters for hospitals. New beds take three to five years to fill, so a chain in expansion shows depressed occupancy for reasons that are not a problem.

Separate mature units from new ones before judging.