An index that measures a hotel’s rate against its market. Above 100 indicates a hotel's rates on average are higher than its competitors.
The Average Rate Index (ARI) is a key performance metric used in the hotel industry to measure the average rate at which rooms are sold in a given time period. It is calculated by dividing the total room revenue by the total number of rooms sold during that period.
ARI is an important indicator of a hotel's revenue management strategy and can help hoteliers understand the overall demand and pricing trends in their market. By tracking ARI over time, hotel operators can identify patterns in customer behavior and adjust their pricing strategies accordingly.
Several factors can affect ARI, including seasonality, events, and market competition. Hotels may also adjust their ARI based on their target customer segments, such as business travelers or leisure tourists.
ARI is often compared to other performance metrics, such as the Average Daily Rate (ADR) and Revenue Per Available Room (RevPAR), to gain a more comprehensive understanding of a hotel's financial health and market position. Overall, ARI is a critical tool for hoteliers to make data-driven decisions and optimize revenue.