Average Room Rate Formula With Example

12 300 daily room revenue 120 rooms sold 102 50 adr.

Average room rate formula with example.

The average cost for a room is 100 a night. It s actually pretty simple. Adr rooms revenue earned number of rooms sold. Potential average single rate single room revenue at published tariff or rack rate number of rooms sold as singles.

It is important to note that in addition to complimentary rooms being discounted from calculations revenue earned away from room revenue is not factored in either and neither is any money paid back out to guests. To calculate the average room rate add up all the room rates and divide the sum by the total number of rooms in the hotel. For example if you sold 3 720 room nights during the month for a total revenue of 381 300 you could calculate your adr using the following formula. The operating performance of a hotel or other lodging business can be determined by using the adr.

75 total room revenue 1000 rooms x 90 room x 75 occupancy x 90 nights in the quarter. In this example there are 20 executive rooms in the hotel that cost 100 per night and 80 regular rooms that cost 75 per night. Single rate where the single rate is same for all room types. The sum of all the room rates is 20 executive rooms times 100.

Calculate your average daily rate. The formula to calculate your average daily rate is. The formula for hotel average rate harr or hadr calculation with examples. 90 average occupancy rate.

Using the second formula we can arrive at the same answer. The formula for potential average single rate. Total room revenue for 21st mar 2017 25000. Rack rate published tariff for single 125 00.

Average room rate formula. Total number of rooms sold in single 25. Calculate average room rate. A hotel wants to know its revpar so it can accurately assess.

Total room sold for 21st mar 2017 250. Be sure to exclude any hotel rooms that are not in use or available to the public from your average room rate formula. The simple formula for calculating the kpi average daily rate adr is as follows. Average daily rate is a powerful metric so one might assume that a complex formula is used in order to come up with this pivotal number.

Your average daily rate is the average rental income per paid occupied room over 30 days. Average hotel room rate harr or hadr total room revenue total rooms sold comp rooms. The average daily rate adr measures the average rental revenue earned for an occupied room per day. Rooms revenue earned number of rooms sold.

It is one of the three main success metrics used to see how well your b b small hotel vacation rental or airbnb is performing. Using the first formula and the information above we can calculate that company xyz s revpar was.