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Revenue Management Glossary

Average Rate Index (ARI, ADR Index)

Average Rate Index is a measure of how your hotel’s average rate compares to that of your competitors. The comparison works against a designated set of competitors (comp set), selected based on their likeness to your own business. I.e hotels with a similar brand, target audience and size. By choosing competitors that have a similar demographic to your own, you’re ensuring the rate comparison is effective within your audience. 

ARI = Your ADR ÷ Your Comp Set’s ADR 

Using ARI keeps you up to date with your competition and gives you peace of mind that you’re not charging way too much or way too little. It’s a good way to keep you and your hotel up to date, with both feet in the game. 

See also: 

Average Daily Rate (ADR)

Competition-Based Pricing

 

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