ADR stands for Average Daily Rate which is most common Key Performance Indicator (KPI) in the hotel industry. Through ADR hoteliers can measure the performance of hotel in comparison to other hotels.
The ADR indicates the income generated by the occupied rooms for a particular duration. The duration can be for 30 days, quarter or a year as required by the hotelier.
There is a simple formula to calculate ADR, that is by dividing the room revenue by the number of rooms sold:-
ADR = Room revenue/Rooms sold
To increase your hotel revenue you need to come up with some strategies to optimize your ADR. Fortunately, we have the following tips that should be helpful in boosting your average daily room rate:
In order to get more bookings, some hotels create a complete tour package. So with such packages, you can also attract more guests towards your property.
In your packages include some extra add-on for free of costs like a complimentary breakfast or dinner.
Another way is to create different packages as per seasons or the type of travelers you attend.
When guests plan their tours, they have to look for bus, train or plane tickets and need to book a cab to reach your hotel.
Create a combo tour package that must include all the arrangements to the start and end of the tour. Such packages will ease their pain of making so many arrangements so that they can enjoy the customer service of your hotel.
Tour packages to entice the guests as they get more than paying less. Thus, such deals only increase the ADR of the hotel.
The online reputation of a hotel matters a lot in the travel industry and it is built upon the feedback on review websites and social media channels.
A well maintained online reputation does have a positive effect on the booking decision of travelers.
Therefore, it can be improved by giving your guests the best services. This will boost the guest satisfaction level, increase your bottom line and directly raise ADR.
Always seek to encourage the guests to give feedback on online review websites. To encourage them you can offer promotional codes or upgrades to guests that leave a review.
In this way, you will be able to maintain the level of online reputation and consistently increase the occupancy rate.
It is important to keep an eye on your competitors as it gives you an idea of how they are progressing in the industry. At the same time, you should understand what is best for your hotel and plan out strategies to get ahead of the competition.
There is one common misconception that by reducing the room price than the competitor results in higher revenue for available rooms.
However good it may sound it is not true. By lowering the rates you may get more occupancy but that doesn’t guarantee higher revenue.
On the contrary, if your room rate is higher it leads to higher ADR that directly impacts your bottom line. Therefore, charge for the best you can offer to your guests. By better prices, you also position your hotel as a premium brand that gives value for money.
Leisure or family travelers always seek for hotels that provide discounts for long stays. Such travelers are interested in exploring the region and need to stay for a good number of days.
You can provide them with a percentage or fixed discount for the third and/or fourth-night stay. Giving such discounts to travelers will certainly boost the revenue as well as the occupancy rate of your hotel.
The success of your hotel depends upon the ADR it generates. While you are focusing on providing the best guest experience, along with these strategies you will be able to enhance the ADR too.