Average Daily Rate (commonly referred to as ADR) is a statistical unit that is often used in the lodging industry. The number represents the average rental income per paid occupied room in a given time period. ADR along with the property's occupancy are the foundations for the property's financial performance. [1]
ADR is one of the commonly used financial indicators in hotel industry used to measure how well a hotel performs compared to its competitors and itself (year over year). It is common in the hotel industry for the ADR to gradually increase year over year bringing in more revenue. However, ADR itself is not enough to measure the performance of the hotel. One should combine ADR, occupancy and RevPAR (revenue per available room) to make a sound judgment on hotel performance.
ADR can vary significantly due to external factors like seasonal demand, local events, or economic conditions. Understanding these variables can help hotel management make more informed pricing decisions.
ADR is calculated by dividing the rooms revenue earned by the number of rooms sold, with house use rooms and complimentary rooms excluded from the denominators. [2]
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Benchmarking is the practice of comparing business processes and performance metrics to industry bests and best practices from other companies. Dimensions typically measured are quality, time and cost.
A hostel is a form of low-cost, short-term shared sociable lodging where guests can rent a bed, usually a bunk bed in a dormitory sleeping 4–20 people, with shared use of a lounge and usually a kitchen. Rooms can be mixed or single-sex and have private or shared bathrooms. Private rooms may also be available. Hostels are popular forms of lodging for backpackers, however very few impose age limits, so hostels are an option for travellers of all ages and styles. The benefits of hostels include lower costs and opportunities to meet people from different places, find travel partners, and share travel experiences. Some hostels, such as in India or Hostelling International, cater to a niche market of travelers. Different hostels can be known for offering different experiences. For example, one hostel might feature in-house social gatherings such as movie nights or communal dinners, another might feature local tours, one might be known for its parties, and another might have a quieter place to relax in serenity, or be located on the beach. Newer hostels focus on a more trendy design, some of which are on par with boutique hotels. Some may cater to older digital nomads, global nomads, and perpetual travelers who prefer slightly more upmarket private rooms or a quieter atmosphere. Hostels may also differentiate themselves by being environmentally friendly ecohostels. In countries where wages are lower, the cost of staying at a hostel may be similar to staying in a budget hotel.
Yield management is a variable pricing strategy, based on understanding, anticipating and influencing consumer behavior in order to maximize revenue or profits from a fixed, time-limited resource. As a specific, inventory-focused branch of revenue management, yield management involves strategic control of inventory to sell the right product to the right customer at the right time for the right price. This process can result in price discrimination, in which customers consuming identical goods or services are charged different prices. Yield management is a large revenue generator for several major industries; Robert Crandall, former Chairman and CEO of American Airlines, gave yield management its name and has called it "the single most important technical development in transportation management since we entered deregulation."
Contribution margin (CM), or dollar contribution per unit, is the selling price per unit minus the variable cost per unit. "Contribution" represents the portion of sales revenue that is not consumed by variable costs and so contributes to the coverage of fixed costs. This concept is one of the key building blocks of break-even analysis.
A vacation rental is the renting out of a furnished apartment, house, or professionally managed resort-condominium complex on a temporary basis to tourists as an alternative to a hotel. The term vacation rental is mainly used in the US. Other terms used are self-catering rental, holiday home, holiday let, cottage holiday and gite.
Single-room occupancy (SRO) is a type of low-cost housing typically aimed at residents with low or minimal incomes, or single adults who like a minimalist lifestyle, who rent small, furnished single rooms with a bed, chair, and sometimes a small desk. SRO units are rented out as permanent residence and/or primary residence to individuals, within a multi-tenant building where tenants share a kitchen, toilets or bathrooms. SRO units range from 7 to 13 square metres. In some instances, contemporary units may have a small refrigerator, microwave, or sink.
In passenger transportation, available seat miles (ASM) or available seat kilometers (ASK) is a measure of passenger carrying capacity. It is equal to the number of seats available multiplied by the number of miles or kilometers traveled by a vehicle.
Fractional ownership is a method in which several unrelated parties can share in, and mitigate the risk of, ownership of a high-value tangible asset, usually a jet, yacht or piece of resort real estate. It can be done for strictly monetary reasons, but typically there is some amount of personal access involved. One of the main motivators for a fractional purchase is the ability to share the costs of maintaining an asset that will not be used full-time by one owner.
A condo hotel, also known as a condotel, hotel condo, or a contel, is a building that is legally a condominium but operated as a hotel, offering short-term rentals, and which maintains a front desk.
An apartment hotel or aparthotel is a serviced apartment complex that uses a hotel-style booking system. It is similar to renting an apartment, but with no fixed contracts and occupants can "check out" whenever they wish, subject to the applicable minimum length of stay imposed by the company.
Overcrowding or crowding is the condition where more people are located within a given space than is considered tolerable from a safety and health perspective. Safety and health perspectives depend on current environments and on local cultural norms. Overcrowding may arise temporarily or regularly, in the home, in public spaces or on public transport. Overcrowding in the home can cause particular concern, since the home is an individual's place of shelter.
A hotel tax or lodging tax is charged in most of the United States, to travelers when they rent accommodations in a hotel, inn, tourist home or house, motel, or other lodging, generally unless the stay is for a period of 30 days or more. In addition to sales tax, it is collected when payment is made for the accommodation, and it is then remitted by the lodging operator to the city or county. It can also be called hotel occupancy tax in places like New York City and Texas. Despite its name, it generally applies to the same range of accommodations.
Revenue management is a discipline to maximize profit by optimizing rate (ADR) and occupancy (Occ). In its day to day application the maximization of RevPAR is paramount.
RevPAR, or revenue per available room, is a performance metric in the hotel industry that is calculated by dividing a hotel's total guestroom revenue by the room count and the number of days in the period being measured.
Property Management Systems (PMS) or Hotel Operating System (HOS), under business, terms may be used in real estate, manufacturing, logistics, intellectual property, government, or hospitality accommodation management. They are computerized systems that facilitate the management of properties, personal property, equipment, including maintenance, legalities and personnel all through a single piece of software. They replaced old-fashioned, paper-based methods that tended to be both cumbersome and inefficient. They are often deployed as client/server configurations. Today, most next-generation property management systems favor a software as a service (SaaS) model sustained by web and cloud technologies.
A financial ratio or accounting ratio states the relative magnitude of two selected numerical values taken from an enterprise's financial statements. Often used in accounting, there are many standard ratios used to try to evaluate the overall financial condition of a corporation or other organization. Financial ratios may be used by managers within a firm, by current and potential shareholders (owners) of a firm, and by a firm's creditors. Financial analysts use financial ratios to compare the strengths and weaknesses in various companies. If shares in a company are publicly listed, the market price of the shares is used in certain financial ratios.
MKG Group is a consulting and market research firm based in Paris, France. The group operates various divisions within the tourism, hotel and hospitality sector, namely monitoring global trends in supply, demand and pipeline growth, including the worldwide chain hotel brand and chain hotel group rankings, as well as conducting specialised industry research for stakeholders, private investors, developers, hoteliers, government and tourism associations, banking and financial institutions, and hedge funds.
TRevPAR, or total revenue per available room, is a performance metric in the hotel industry. TRevPAR is calculated by dividing the total net revenues of a property by the total available rooms.
Adjusted RevPAR, is a performance metric used in the hospitality industry. It is calculated by dividing the variable net revenues of a property by the total available rooms.