Glossarytaught in M5.10
Average daily rate
Also called average room rate, average daily room rate.
Room revenue divided by rooms sold. The pricing half of hotel performance.
Rate has far more operating leverage than occupancy, because an extra rupee of rate carries almost no additional cost while an extra room sold carries housekeeping, utilities and amenities.
Rate is also the slower variable to recover after a downturn, since hotels discount to fill first and raise prices only once occupancy is comfortable.
Watch rate through the recovery. It tells you where the cycle is.