What is the definition of Average Rate per Guest in the hotel industry?
ARG abbreviates for: Average Rate per Guest
Total room revenue separated by the number of guests.
As hotels seldom have double rooms, triple, quadruple or even more accommodations per room, this ratio permits an insight into exactly what rate is paid on average. Knowing the average charge per guest can help hotels evaluate the different charges customers give with the average. Too much dispersion in a hotel may cause some customers to feel as if they have been overcharged, if some consumers were able to pay for rooms at much lesser rates than average.
How to compute the Average Rate per Guest (ARG)?
Formula: Average Rate per visitor = Total Room Revenue / Total Number of Guests