Hotel Yield Management
Formula For Average Guest Per Room (APR) - APR Calculator
Average Guest Per Room (APR) - Provides the average number of guests occupied per room in the hotel, This ratio is normally based on the total guest in the hotel including children divided by the total number of rooms sold.
The formula for calculating Average Guest Per Room (APR) is as below:
Average Guest Per Room = Total Number of Guests / Number of Rooms Sold
Average Guest Per Room W/O Child = Total Number of Adults / Number of Rooms Sold
APR - Average Guest Per Room Calculator:
APR with Total Guests =
APR Without (W/O) Child =
Example 1 APR with Total Guests:
Total Guest Occupied for 12th September 2017 = 453
Total Rooms Sold for 12th September 2017 = 200
Average Guest Per Room = 453 / 200
= 2.26
Example 2 APR Without (W/O) Child:
Total Adults Occupied for 12th September 2017 = 410
Total Rooms Sold for 12th September 2017 = 200
Average Guest Per Room = 410 / 200
= 2.05
Example 3 APR with Total Guests (Monthly):
Total Guest Occupied for September 2017 = 11935
Total Rooms Sold for September 2017 = 5840
Average Guest Per Room = 11935 / 5840
= 2.04
Example 4 APR Without (W/O) Child (Monthly):
Total Adults Occupied for September 2017 = 11100
Total Rooms Sold for September 2017 = 5840
Average Guest Per Room = 11100 / 5840
= 1.9
Formula For Average Rate Per Guest (AGR) - AGR Calculator
The Average Rate Per Guest (AGR) - Provides the average revenue contribution by each guest occupied in the hotel, This rate is normally based on every guest in the hotel including children. Some hotels take their AGR without considering children.
The formula for calculating Average Rate Per Guest (AGR) is as below:
Average Rate Per Guest= Total Room Revenue / Total Number of guests
Average Rate Per Guest W/O Child = Total Room Revenue / Total Number of Adults
Average Rate Per Guest (AGR) Calculator:
AGR with Total Guests =
AGR Without (W/O) Child =
Example 1 AGR with Total Guests:
Total Guest Occupied for 12th September 2017 = 453
Total Room Revenue for 12th September 2017 = 70000.00
Average Rate Per Guest = 70000 / 453
= 154.53
Example 2 AGR Without (W/O) Child:
Total Adults Occupied for 12th September 2017 = 410
Total Room Revenue for 12th September 2017 = 70000.00
Average Rate Per Guest = 70000 / 410
= 170.73
Example 3 AGR with Total Guests (Monthly):
Total Guest Occupied for September 2017 = 11935
Total Room Revenue for September 2017 = 1926000.00
Average Rate Per Guest = 1926000.00 / 11935
= 161.37
Example 4 AGR Without (W/O) Child (Monthly):
Total Adults Occupied for September 2017 = 11100
Total Room Revenue for September 2017 = 1926000.00
Average Rate Per Guest = 1926000.00 / 11100
= 173.51
Formula to Calculate Average Room Rate (ARR) | Average Daily Rate (ADR)
ADR (Average Daily Rate) or ARR (Average Room Rate) is a measure of the average rate paid for the rooms sold, calculated by dividing total room revenue by rooms sold.
Some hotels calculate ARR or ADR by also including the complimentary rooms this is called as Hotel Average Rate. By Taking the HARR the management can find out the actual effect of complimentary stays on the average room rate.
The formula for ARR or ADR calculation with examples:
Average Room Rate (ARR or ADR) = Total Room Revenue / Total Rooms Sold
OR
Average Room Rate (ARR or ADR) = Total Room Revenue / Total Occupied Rooms
Average Rooom Rate (ARR or ADR) Calculator:
ARR or ADR (Occupied Rooms)=
ARR or ADR (Sold Rooms)=
Example 1:
Total Room Revenue for 01st Jan 2017 = 25000.00
Total Room Sold for 01st Jan 2017 = 250
ARR or ADR for 01st Jan 2017 = 25000.00 / 250
= 100
Example 2:
Total Room Revenue for 31st Dec 2016 = 95985.58
Total Room Sold for 31st Dec 2016 = 277
ARR or ADR for 31st Dec 2016 = 95985.58 / 277
= 346.52
Example 3 (Monthly ARR/ADR):
Total Room Revenue for the Month of October = 2,250,485.58
Total Room Sold for the Month of October = 5822
ARR or ADR for October = 2,250,485.58 / 5822
= 386.55
The formula for Hotel Average Rate HARR or HADR calculation with examples:
Average Hotel Room Rate (HARR or HADR) = Total Room Revenue / Total Rooms Sold + Comp Rooms
Example 1:
Total Room Revenue for 21st Mar 2017 = 25000
Total Room Sold for 21st Mar 2017 = 250
Total Complimentary rooms for 21st Mar 2017 = 2
HARR or HADR for 21st Mar 2017 = 25000 / (250+2)
= 99.20
Example 2:
Total Room Revenue for 3rd Dec 2015 = 95985.58
Total Room Sold for 3rd Dec 2015 = 277
Total Complitmentary rooms for 3rd Dec 2015 = 2
HARR or HADR for 3rd Dec 2015 = 95985.58 / (277+2)
= 344.03
Example 3 (Monthly ARR/ADR):
Total Room Revenue for the Month of October = 2,250,485.58
Total Room Sold for the Month of October = 5822
Total Complitmentary rooms for October = 25
ARR or ADR for October = 2,250,485.58 / (5822+25)
Multiple Occupancy Ratio / Multiple Occupancy
Percentage Calculator
Multiple Occupancy Percentage is used to determining
the double occupancy ratio of the hotel and to forecast food and beverage revenue, identify
clean linen requirement and also to analyze average daily room rates.
Multiple occupancy percentages can be calculated
in different ways. Below are few methods or formulas for calculating multiple
occupancy ratios for your hotel.
Multiple Occupancy Percentage = (Number of Rooms Occupied by more than
one Adult or Pax) / (Total Number of Rooms Occupied) * 100
Single Occupancy % (Occupied Rooms) = (Number of Single Rooms Occupied) / (Total Number of
Rooms Occupied) * 100
Single Occupancy % (Available Rooms)
= (Number of Single Rooms Occupied) / (Total Number of Available rooms) * 100
Double Occupancy % (Occupied Rooms) =
(Number of double Rooms Occupied) / (Total Number of
Rooms Occupied) * 100
Double Occupancy % (Availalbe Rooms)
= (Number of double Rooms Occupied) / (Total Number of Available rooms) * 100
Multiple Occupancy Percentage Calculator:
No. Of Rooms Occupied by More than one Adult :
Total Rooms Occupied:
Total Comp & House:
Occupancy % (Occupied Rooms)=
Occupancy % (Sold Rooms)=
1) Multiple Occupancy Percentage
Calculation (Based on Rooms Occupied)
Total Number of Rooms with More than
One Adult on 10th September 2017 = 115
Total Number of Rooms Occupied on
10th September 2017
= 207
Hotel's Occupancy Percentage = 115 /
207 *100
= 55.55 %
2) Double Occupancy Percentage
Calculation (Based on Rooms Occupied)
Total Number of Rooms with Double
Occupancy on 10th September 2017 = 105
Total Number of Rooms Occupied on
10th September 2017
= 207
Hotel's Occupancy Percentage = 105 /
207 *100
= 50.72 %
3) Double Occupancy Percentage
Calculation (Based on Available Rooms)
Total Number of Rooms with Double
Occupancy on 10th September 2017 = 105
Total Number of Available Rooms on
10th September 2017
= 210
Hotel's Occupancy Percentage = 105 /
210 *100
= 50 %
4) Single Occupancy Percentage
Calculation (Based on Rooms Occupied)
Total Number of Rooms with Single
Occupancy on 10th September 2017 = 102
Total Number of Rooms Occupied on
10th September 2017
= 207
Hotel's Occupancy Percentage = 105 /
207 *100
= 49.27 %
5) Single Occupancy Percentage
Calculation (Based on Available Rooms)
Total Number of Rooms with Single
Occupancy on 10th September 2017 = 105
Total Number of Available Rooms on
10th September 2017
= 210
Hotel's Occupancy Percentage = 105 /
210 *100
= 50 %
Formula for calculating Revenue per Available Room (RevPAR)
Revenue per Available Room (RevPAR) - RevPAR is one of the most important statistics in the hotel industry. RevPAR divides the total revenue generated by the hotel by the number of available rooms to sell (Available rooms = Total rooms in the hotel - Out of Order rooms).
It measures in effect the revenue generation capability of the hotel. Hotels with a large food & beverage operations and other recreational facilities have RevPAR well above the average Daily Rate.
The downside of RevPAR is the formula only evaluates your income from room sales ie it is not including other revenue generating areas like Food and Beverage, Spa, Recreational facilities etc. Those hotels with fewer revenue centres have RevPAR number closer to their ADR / ARR.
The formula for RevPAR calculation with examples:
RevPAR = Total Room Revenue / Total Number of Available Rooms for sale
Calculate Revenue Per Availalbe Room (RevPAR)
Revenue Per Availalbe Room (RevPAR):
Example 1:
Total Room Revenue for 01st Sep 2017 = 14,585.26
Total Available Rooms for sale 01st Sep 2017 = 258
RevPAR = 14585.26 / 258
= 56.53
Example 2:
Total Room Revenue for 30th Aug 2017 = 22,890.00
Total Available Rooms for sale 30th Aug 2017 = 257
RevPAR = 22890.00 / 257
= 89.06
Example 3 - Monthly RevPAR:
Total Room Revenue for September 2017 = 682,800.00
Total Available Rooms for sale September 2017 = 7750
RevPAR = 682,800.00 / 7750
= 88.10
TRevPOR (Total Revenue per Occupied Room) - Is a measure to calculate total hotel revenue per occupied room. Which is calculated or derived from the sum of room revenue, food and beverage (F&B) revenue, and other revenues divided by the total occupied room.
The formula for TRevPOR calculation with examples:
TRevPOR = (Room + F&B + Other Revenue) / Total occupied rooms
Example 1:
Total Hotel Revenue for 01st Sep 2017 = 25,585.26
Total Rooms Occupied for 01st Sep 2017 = 230
TRevPOR = 25,585.26 / 230
= 111.24
Example 2:
Total Hotel Revenue for 30th Aug 2017 = 33,890.00
Total Rooms Occupied 30th Aug 2017 = 225
TRevPOR = 33,890.00 / 225
= 150.62
Example 3 - Monthly TRevPOR:
Total Hotel Revenue for August 2017 = 775,090.00
Total Rooms Occupied for August 2017 = 6820
TRevPOR = 775,090.00 / 6820
= 113.64
Formula For Calculating Room Achievement Factor AF (Rate Potential Percentage)
The Room Achievement factor is also known as Rate Potential Percentage of a hotel, is defined as the percentage of the Rack Rate that the hotel actually receives by selling their rooms. Room Achievement factor is calculated by dividing the Actual Average Rate (ARR or ADR) by the Potential Average Room Rate.
Additionally, depending upon the hotel's management policy the Actual Average Rate is either divided by the total Rooms Sold or Occupied Rooms. Room Sold = (Occupied Rooms - Complimentary and House use)
The Formula for Room Achievement Factor AF:
Room Achievement Factor = Actual Average Rate / Potential Average Rate
Calculate Your Room Achievement Factor (AF)
Room Achievement Factor=
Example 1 - Where Actual Average Rate Taken as Rooms Sold:
Actual Average Rate = 173.00
Potential Average Rate (PAR) = 223.00
Room Achievement Factor (AF) = 173.00 / 223.00
= 0.78 or 78%
Example 1 - Where Actual Average Rate Taken as Occupied Rooms:
Actual Average Rate = 165.00
Potential Average Rate (PAR) = 223.00
Room Achievement Factor (AF) = 165.00 / 223.00
= 0.74 or 74%
Calculating The Room Rate Spread
Rate Spread is another important matrix used by revenue management team in large hotels or by the front office manager in smaller hotel operations.
The value for rate spread is derived from various room types in the hotel in order to make essential yield decisions by the hotel management. Rate Spread is calculated by taking the difference between Potential Average Double Rate and Potential Average Single Rate.
The Formula for Calculating Rate Spread:
Rate Spread = Potential Average Double Rate - Potential Average Single Rate
Calculate Room Rate Spread (RRS)
Room Rate Spread of Hotel:
Example 1:
Potential Average Single Rate = 150.00
Potential Average Double Rate = 225.00
Rate Spread of the hotel = 225.00 - 150.00
= 125.00
Example 2:
Potential Average Single Rate = 99.00
Potential Average Double Rate = 109.00
Rate Spread of the hotel = 99.00 - 109.00
= 10.00
Example 3 (Monthly Rate Spread):
Potential Average Single Rate For the Month = 129.69
Potential Average Double Rate For the Month = 158.88
Rate Spread of the hotel = 129.69 - 158.88
= 29.19
Types of Rate Codes used in hotels
Hotels always have more than one rate code
category for each room type. Room rates categories generally correspond
to types of rooms available to sell in the hotel ( Eg: Suite, Deluxe, Premier, Studio, Penthouse etc. ).
Room Rates and rate codes may also
vary according to the available room features such as room size, location,
view, furnishing, décors etc and also with competitors pricing.
Standard Room Rates and Rate codes
used in the hospitality industry:
Rack Rate: Is the Standard rate or Published tariff defined by the hotel management for a
particular room category/type. This is generally printed on the tariff sheet of
the hotel and these details are also submitted to the local government
authorities for hotel licensing and in some countries for Gov.
tax compliance. In other word's these rates are always without any
sorts of discounts.
Corporate or Commercial Rate: These are rates offered to companies that provide frequent
business for the hotel or its chain. This rate may vary according to the volume
of business guaranteed by the companies. Eg: NEG1, COR1 etc.
ADHOC Rate Code: These are normally non-standard rates which are offered as special
one-time rates for first time corporate's.
Group Rate: These are rates which are offered to groups, meetings and
conventions using the hotel for their functions.
Promotional Rate Codes: These rates are generally offered during low occupancy periods to any guest to promote occupancy. Early Bird
Rates, Stay for 3 and pay for 1 etc. are some examples. These rates may also
include certain add-ons to attract the customers like free WiFi for 24
Hrs, free buffet dinner etc.
Incentive Rate Code: The Rate offered to individuals who belong to an association or
holders of special membership cards or Credit cards. Eg: Amex / VISA /
Master cardholders get 5% discount on Rack Rate, Lufthansa Frequent Flyer
members get a 25% discount etc. For hotels, these rates always give potential
referral business.
Early-bird Rate: This type of rates are only open X days before arrival. Eg: Open only when 7 Days before
arrival, 14 Days Before Arrival, 30 Days Before arrival Etc.
Family Rate: A
rate reserved for families with children. Usually, these rates
include Extra Bed charges and may also include some free
add-on activities for children.
Package Rate: Rates that includes a guest room in combination with other
available events or activities. ( Eg: Best of London package which
includes room rental, all meals, site seeing, airport transfers etc. ) Package
rate can be also a simple room and meal package like American Plan ( AP), Modified
American Plan (MAP), Continental Plan ( CP )etc.
Best Available Rates ( BAR ): These rate codes are the lowest discounted rate available for a
day which can be offered to the guest by the Reservation or Front desk staff. BAR can be of different
types:
'Dynamic BAR' - Has different tiers
and each tier will be opened and closed according to the occupancy of the
hotel. ( The new age hotel management software's does this automatically for
the Revenue Managers.)
Sample Dynamic BAR Rate
|
BAR
Level
|
Open
/ Close when Occupancy Between
|
|
BAR -01
|
0%
TO 25 %
|
|
BAR -02
|
26
% TO 35 %
|
|
BAR - 03
|
36%
TO 50%
|
|
BAR - 04
|
51%
TO 75%
|
|
BAR - 05
|
76%
TO 100%
|
'Daily BAR' - Has a pre-defined daily room rate regardless of room categories (
Run of the house) and occupancy, these rates are set according to the day of the week, as per
the demand of hotel rooms in the city, special day's or seasons, as per the room demand forecast done by the hotel revenue manager.
Sample Daily BAR Rate
|
DATE
|
DAY
|
RATE
($)
|
|
19/10/2016
|
WED
|
200.00
|
|
20/10/2016
|
THU
|
200.00
|
|
21/10/2016
|
FRI
|
250.00
|
|
22/10/2016
|
SAT
|
250.00
|
|
23/10/2016
|
SUN
|
250.00
|
|
24/10/2016
|
MON
|
200.00
|
|
25/10/2016
|
TUE
|
200.00
|
Complimentary Rate: A Room rate with zero room charge which is offered to special
guests, industry leaders, Gov. officials etc.
House use Rate: A Room rate with zero room charge which is used for rooms stays
for hotel purpose. Eg: Manager or duty room, In-house General / Resident manager room etc.
Zero Rate Code: This kind of rates are used as system requirements for PMS's as these would be tagged to Dummy rooms, Paymaster rooms and Group Master rooms.
Virtual Rate / Follow Rates: A Special Type of rate codes whose values are derived from another
rate code or rate group. Eg: BAR1 which is 10% off on the Rack Rate.
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