A Comprehensive Overview of Calculating Average Room Rates in Hotel Industries

Average Daily Rate (ADR) is a type of metric that is widely used in the hostel industries to indicate the average revenue earned from an occupied room on a given day. Using an effective RMS can help you to understand how to calculate the average room rate and provide the best strategies to increase the occupancy rate in the hotel.



Understanding ADR- Average Daily Rate

The ADR signifies how much revenue is made on an average. The higher the ADR, the better the occupancy rate. It shows that a hotel is getting a profit by renting out its rooms. In order to increase the ADR, hotels need to use revenue management systems that can effectively boost the price per room.

There are a few methods of measuring ADR. It can be measured by going through the trends such as seasonal impact, booking patterns, etc. ADR can be used to measure relative performance as it is a metric that can be compared to other hotels which have similar features such as size, location, customers, etc.

Formula to calculate ADR

The formula to calculate ADR is by taking the average revenue earned from every room upon the number of rooms sold, excluding complimentary rooms.

Average daily rate= Total room revenue/Total occupied rooms

Conclusion

If you want to know how to calculate the average room rate, the best option is to integrate an effective RMS software from Pricepoint. It offers the best modern AI-based RMS software that can effectively use a dynamic pricing strategy to increase the occupancy rates in the hotels and large airliners. It guarantees a 13% increase in the occupancy rate of your hotel.

To use their automated RMS software, click here and discuss your requirement with the experts.

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