Average Room Rate Formula With Example

Single rate where the single rate is same for all room types.

Average room rate formula with example.

For example a hotel has a total of 150 rooms of which the average occupancy rate is 90. The operating performance of a hotel or other lodging business can be determined by using the adr. Calculate average room rate. 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.

The average cost for a room is 100 a night. Total complimentary rooms for 21st mar 2017 2. The formula to calculate your average daily rate is. Using the first formula and the information above we can calculate that company xyz s revpar was.

The simple formula for calculating the kpi average daily rate adr is as follows. 12 300 daily room revenue 120 rooms sold 102 50 adr. Be sure to exclude any hotel rooms that are not in use or available to the public from your average room rate formula. Total number of rooms sold in single 25.

90 average occupancy rate. 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. Using the second formula we can arrive at the same answer. Total room sold for 21st mar 2017 250.

The sum of all the room rates is 20 executive rooms times 100. 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. Adr rooms revenue earned number of rooms sold. Calculate your average daily rate.

The formula for potential average single rate. 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 formula for hotel average rate harr or hadr calculation with examples. Potential average single rate single room revenue at published tariff or rack rate number of rooms sold as singles.

Total room revenue for 21st mar 2017 25000. Average hotel room rate harr or hadr total room revenue total rooms sold comp rooms. Average room rate formula. The average daily rate adr measures the average rental revenue earned for an occupied room per day.

Your average daily rate is the average rental income per paid occupied room over 30 days. A hotel wants to know its revpar so it can accurately assess. Rack rate published tariff for single 125 00. Example 1 potential avg.

It s actually pretty simple. Rooms revenue earned number of rooms sold.