Revenue metrics
What is ARR in hotels?
ARR, or average room rate, is the average price earned per room sold in a period: room revenue divided by room nights sold. In India the term is used widely and generally means the same as ADR. Some hotels use ARR for a weekly or monthly average and ADR for a single day.
ARR formula
ARR = room revenue ÷ room nights sold
A hotel that earns ₹45,00,000 from 900 room nights in a month has an ARR of ₹5,000. Room revenue is taken before GST, and complimentary rooms are normally left out. You can work it out with the RevPAR, ADR and occupancy calculator.
ARR and ADR
The two are calculated the same way. If you compare your figures with another hotel's, check that both treat complimentary rooms, taxes and meal-plan revenue alike, since those choices change the number more than the name does. See ADR.
In StaySynq
StaySynq shows occupancy, ADR and RevPAR live from your own bookings, by day, month or channel.
Common questions
Is ARR the same as ADR?
In most hotels, yes. Both divide room revenue by rooms sold. Where a hotel uses both, ADR usually refers to one day and ARR to a longer period.
Related terms
- ADR (average daily rate)ADR, or average daily rate, is the average price a hotel earns for each room it sells in a period. It is calculated by dividing room revenue by the number of room nights sold. ADR shows how well you are pricing, but says nothing about how many rooms stayed empty.
- RevPARRevPAR, or revenue per available room, is a hotel's room revenue divided by the number of room nights it had available to sell in a period. It combines price and occupancy into one number, which makes it the standard way to compare hotels of different sizes.
- Occupancy rateOccupancy rate is the percentage of a hotel's available room nights that were sold in a period. It is calculated by dividing room nights sold by room nights available. It shows how full the hotel was, but not what guests paid.
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