What is the meaning / definition of ARR in the hospitality industry?
ARR stands for: Average Room Rate.
It is a hotel KPI which measures the average rate per available room – similarly to ADR.
ARR = Total Room Revenue / Total Rooms Occupied
Both of them can be used for the same purpose which is to calculate the average rate of the room. However, ARR can also be used to measure the average rate for a longer period of time (weekly, monthly) while ADR may only be used to measure the average rate of one day.
How to calculate ARR?
- ARR Formula= Total Room Revenue / Total Rooms Occupied
This is necessary to measure the financial performance of the hotel.