Revenue metrics
What is a rack rate?
A rack rate is the full published price of a hotel room, before any discount, package or negotiated rate. Few guests pay it, but it acts as the reference point from which corporate, promotional and OTA rates are discounted.
Why hotels still set a rack rate
Discounts are usually expressed against the rack rate ('20% off'), contracted rates are negotiated from it, and it is the rate charged when demand is highest. It also sets the ceiling for derived rate plans.
Rack rate vs BAR vs ADR
The best available rate is the lowest unrestricted rate on a given day and moves with demand. ADR is what you earned on average. The rack rate is normally the highest of the three.
Common questions
Does GST depend on the rack rate?
In India, the GST slab for a room night is based on the actual tariff charged for that night, not the rack rate. See GST billing.
Related terms
- BAR (best available rate)BAR, or best available rate, is the lowest rate a hotel offers to the general public for a given date without restrictions such as prepayment or a minimum stay. It changes with demand, and most other rate plans are set as a discount or premium to it.
- 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.
- Rate parityRate parity is the practice of offering the same price for the same room, dates and conditions on every public sales channel, including OTAs and the hotel's own website. Many OTA contracts require it, and visible differences can push a hotel down in OTA search results.
Ready to unify your operations?
Book a 30-minute demo. We'll walk through your specific property type, room count, and channel mix, then show you exactly what your data looks like on StaySynq.
Early access · founder-led onboarding · launch pricing locked through year one