Average Room rate (ARR)

What is the definition of ARR in the hospitality industry?

ARR stands for: Average Room Rate.

It is a hotel KPI which evaluates the average rate per available extent – similarly to ADR.

Both of them can be of use for the same reason which is to compute the average rate of the room. However, ARR can also be used to measure the average price for a longer period of moment (weekly, monthly) while ADR may only be used to calculate the average rate of one day.

How to compute ARR?

ARR Formula= Total Room income / Total Rooms engaged

This is essential to measure the financial presentation of the hotel.