The Average Daily Rate or the ADR in the hotel industry is often a primary concern for most hotel owners. However, in today’s times, every hotel owner including independent hoteliers can definitely improve the ADR using simple tactics to lend a boost to profits. A hotel’s occupancy rates are often a source of worry for hoteliers who need to constantly reinvent their revenue management strategies to work around a hotel’s ADR.
Let’s first get a firm understanding on a hotel’s average daily rate and why a hotel’s room occupancy rate should not be a cause of worry for hotel owners.
What is ADR in the hotel industry?
The Average Daily Rate is a term popular amongst hoteliers and it acts as a strong indicator of a hotel’s performance and profits. The ADR helps one determine the average rate of the rooms sold over a specific period of time. This duration can refer to a quarter, a 30-day period or even a year. A hotel’s average daily rate gives an indication of the overall income generated from every paid and occupied room for that particular duration as calculated by the hotel owner.
ADR in the hotel industry is calculated by dividing the room revenue by the number of rooms sold i.e,
ADR = Room revenue ÷ Rooms sold
ADR revenue management requires application of certain tactics. Independent hotel owners can certainly learn how to maximize hotel revenue using the following tips.
How to Increase ADR for Independent Hotels using these 5 Tips
You need to have your pricing strategies in place to increase hotel revenue from your average daily room rate.
A good combination of the handy tips mentioned below should help you achieve your goals in the New Year and optimize ADR for your hotel property.
#1: Package it Right
If you’re looking to increase hotel revenue, create attractive packages that should tempt the guest into getting more for less. Have an in-house dining area? Offer a complimentary breakfast option. Your basic package must include an add-on, one that adds value to your guests’ stay. Define packages as per the season, or the type of guests your independent hotel caters to. Is there an event in the city? Offer free tickets at the time of booking to increase your revenue per customer. Your guests might be seeking travel arrangements from the airport and back. Add these to your package to create a final deal that attracts and retains guests to your hotel brand. Gently nudge your guests to spend a little more to increase your ADR.
