ARI stands for Average Rate Index, a metric used in the hospitality industry to compare the average room rates of a property against its competitive set. It helps hoteliers gauge their pricing competitiveness in the market and make informed decisions to optimise room rates for maximum revenue.
What is ARI in the hospitality industry?
ARI stands for Average Rate Index, which is a metric used to assess a hotel's pricing competitiveness compared to its competitors. It helps hoteliers understand how their average room rates compare to the average rates of similar properties in the market.
How is ARI calculated?
ARI is calculated by dividing the average daily rate (ADR) of a hotel by the average daily rate of its competitive set, then multiplying by 100.
This formula allows hoteliers to determine whether their room rates are above, below, or in line with the market average, helping them adjust pricing strategies to optimise revenue.