Average Room Rate Formula With Example

The formula to calculate your average daily rate is.

Average room rate formula with example.

Rooms revenue earned number of rooms sold. Using the first formula and the information above we can calculate that company xyz s revpar was. A hotel wants to know its revpar so it can accurately assess. 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.

The operating performance of a hotel or other lodging business can be determined by using the adr. The average daily rate adr measures the average rental revenue earned for an occupied room per day. Calculate average room rate. 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.

Single rate where the single rate is same for all room types. Total room revenue for 21st mar 2017 25000. The simple formula for calculating the kpi average daily rate adr is as follows. The sum of all the room rates is 20 executive rooms times 100.

For example a hotel has a total of 150 rooms of which the average occupancy rate is 90. The formula for potential average single rate. Total complimentary rooms for 21st mar 2017 2. Average room rate formula.

Your average daily rate is the average rental income per paid occupied room over 30 days. The average cost for a room is 100 a night. Total room sold for 21st mar 2017 250. 75 total room revenue 1000 rooms x 90 room x 75 occupancy x 90 nights in the quarter.

Rack rate published tariff for single 125 00. Adr rooms revenue earned number of rooms sold. Calculate your average daily rate. The formula for hotel average rate harr or hadr calculation with examples.

Average hotel room rate harr or hadr total room revenue total rooms sold comp rooms. 90 average occupancy rate. Example 1 potential avg. 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.

Total number of rooms sold in single 25. Using the second formula we can arrive at the same answer. 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. 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.

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