Average Daily Rate in the Hospitality Industry

One of our specialisms, here at CRM, is working with businesses in the pubs, restaurants and hospitality industry.

When helping our clients in this industry to make their numbers work, we help them focus on certain key performance indicators.

One of these is the Average Daily Rate, which is an important measure for those in the Hotel and Accomodation industries, which, along with 'Occupancy rates' and 'Room Revenue per Available Room' is commonly viewed as a measure of the business success.

The Daily Rate is the amount of revenue which you are generating per day, per occupied room. The higher this number, the more you are earning. By measuring this as an average, periods of high and low occupancy are combined together in order to give a truer figure of how much money is being generated on a daily basis. 

To calculate your Average Daily Rate you’ll need to know; the amount charged per occupied room in the full period (eg month, day, week, year), the number of occupied rooms and the number of days in your review period. 

You calculate your Average Daily Rate by dividing the amount charged per occupied room by the number of occupied rooms, and then by the number of days in your reporting period.