The Average Rate Index shows how your rates compare with other hotels to help determine if you should raise, lower or hold your room rates.
ARI is calculated by comparing the Average Daily Rate (ADR) across a range of your competitor hotels. The formula is: ARI = Your ADR / Competitors average ADR
A rate greater than 1 shows that your hotel is on averaged priced higher than your competitors. While a rate lower than 1 means that you are priced lower.
Knowing this data can help you decide whether to adjust your rates to increase bookings or attract lower occupancy but higher revenue, as it’s not always ideal to operate at 100% occupancy.
Hotel pricing data can be retrieved manually via a booking site or the hotel website but it is much easier and quicker to use a tool specially designed to retrieve pricing data like Prophet, SiteMinder’s hotel business intelligence system.35,000 hotels drive more bookings, more profitably with SiteMinder’s product suite. Take a tour of the platform and see what you could achieve.