A common key performance indicator used by swim schools and other class-based businesses is occupancy.
In this article, we explore how to measure occupancy, why it’s important, and 3 ways you can use it to grow your swim school.
Occupancy – How to measure it?
Occupancy is a measurement of your swim school’s efficiency. It measures the available number of lesson spaces vs the actual enrolled or booked class spaces.
For example, if you offer 100 classes per week, and have a max of 6 students per class your weekly available number of lessons would be 600 lessons.
If you have 490 active students in your swim school then your overall occupancy rate would be 490/600 x 100 = 81.6% occupancy.
The higher your occupancy rate, the more efficiently you are using your available resources and turning them into revenue.
An occupancy rate of 60% would mean you are paying a number of instructors their full wage but only getting 60% of their available revenue in return.
Occupancy rates can move up and down depending on seasonal demand and other factors so it’s important to regularly keep an eye on it. We recommend once per month.
It can also be useful to break down your occupancy performance by other key variables such as day and level.
This data can provide you with some deeper insights. For example- Your occupancy for Saturday maybe 90% however only 71% for Mondays.
3 ways to use occupancy to grow your swim school
Now let’s explore 3 ways we can use our occupancy reporting to help us grow and improve the profitability of our swim school.
- Where to focus your marketing efforts
- Your occupancy reporting can give you indicators that you can use to drive your marketing efforts. For example, if your occupancy rate sits at 60% when its typically above 80% you would consider doing a marketing drive or potentially re-arrange your available lessons to make your operation more efficient.
If a specific day has a lower occupancy rate than others you may look to promote that day as available to your email list.
- Where to focus your retention efforts
- If you have a poor occupancy rate for a specific day or level, it may reflect poor customer retention (high drop out rate). You may start with a high occupancy for a specific level however if there is a high churn rate your occupancy can quickly drop.
If this is the case it should be a red flag and prompt you to focus more on customer retention and the strategies that drive improved performance in this area such as focusing on communication and progression.
- Capacity decisions
- The third way to use your occupancy reporting information is to manage capacity decisions.
- Do you need to hire more staff?
- Do you need to add more classes for a specific day?
- Do you need to add more classes for a specific level/age group?
- Do you need to reduce the number of instructors on specific days?
These are all decisions that you can make more easily with the appropriate occupancy data.
Overall, occupancy is a measure of your business efficiency. Every open class space in your swim school is lost revenue and this can really add up over months and years.