Alongside revenue per available room (RevPAR), the average daily rate (ADR) is a key performance indicator that hotels use to track their success over a specific length of time.

It indicates the average rate you sold your rooms at over a period of a month, a quarter, or a year etc.

For example if your total revenue for a 30-day month is $300,000 and you have 100 rooms, your ADR is $100 (300,000 ÷ 100 ÷ 30).

Obviously it can get more complicated than this and it might pay to have a tool that can calculate data for you. ADR doesn’t take into account seasonal fluctuations or different rate periods but it is still a good metric to compare your hotel with competitors and measure trends at your property.

Because the overall economy largely dictates room rates and you need to remain in-line with your competitors, you need to influence your ADR with other factors to increase revenue per customer.

Smart revenue management and pricing strategies are needed if you want to optimise your ADR but here are some handy tips…

1. Packages, promotions and extras

Convince your guests to spend more by using your booking engine to entice them into purchasing extra-value offers.

Packages are any rate that pairs the accommodation with an add-on; it could be free breakfast, free parking, or a ticket to a local event or attraction.

Take a look at these methods to make sure your packages offer a unique experience.

Promotions are special rates that can change depending on:

  • the season or holiday period;
  • if the guest is a VIP; or,
  • you want to capitalise on an event.

You can get even more specific by offering things like mobile-only promotions.

Extras are an added expenditure that guests will only realise they want during the booking process.

This might include items like champagne and chocolate stocked in their room, shuttle services from the airport, or activities like exercise classes.

Extras are an added expenditure that guests will only realise they want during the booking process.

This might include items like champagne and chocolate stocked in their room, shuttle services from the airport, or activities like exercise classes.

2. Events and tours

Selling tickets to local events, tours, or offering car rental is a good point-of-sale opportunity to increase your revenue per customer as well as providing a more satisfying experience for your guest.

3. Sell your hotel products

If you offer your guests the chance to buy your shampoo, bath and beach towels, art pieces, linen and so on, it can provide you with extra revenue and might even save you from the cost of replacing items that guests ‘accidentally’ pack with their own luggage when they depart.

4. Referrals and return business

If your guests give you positive feedback on completion of their stay, encourage them to share their experience with family and friends, and on social media to drive more bookings and brand awareness.

You could also set guests up with a promotion code to get a discount the next time they stay. This encourages return business and helps you keep a consistent occupancy rate.

5. Accommodate flexible travellers

Some travellers don’t have a set itinerary or allow themselves flexibility with their schedule, so take the opportunity to raise your occupancy and incremental revenue by offering guests a discount for an additional night’s stay.

This might appeal to families and backpackers, or the ever-evolving ‘bleisure’ travellers.

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