Hotel average daily rate calculation
The average daily rate is calculated by taking the average revenue earned from rooms and dividing it by the number of rooms sold. It excludes complimentary rooms and rooms occupied by staff. ADR (Average Daily Rate) or ARR (Average Room Rate) is a measure of the average rate paid for the rooms sold, calculated by dividing total room revenue by rooms sold. Some hotels calculate ARR or ADR by also including the complimentary rooms this is called as Hotel Average Rate. By Taking the HARR the management can find out the actual effect of complimentary stays on the average room rate. Do you know the formula to use to calculate your hotel’s ADR (average daily rate)? If you’re looking to develop an effective revenue management strategy and improve profits, understanding your hotel’s ADR is critical. Beyond just knowing your ADR, you should understand what action to take to improve it. Average Daily Rate (ADR) Explained