Strategies to increase your Hotel’s Average Daily Rate

Posted by Leeanne Potgieter on



Strategies to increase your Hotel’s Average Daily Rate.

One of the most important metrics to evaluate your hotel’s performance is known as the average daily rate (ADR). The ADR is crucial when analysing the key performance indicators (KPI’s) of your hotel to ensure the success of your hotel is measured accordingly.

 What is the Average Daily Rate (ADR) for hotels?

The ADR is a calculation for how much money your hotel brings in per day in room rentals. Please note this is not a comprehensive calculation, as ADR only accounts for the amount made per day in room booking and not ancillary revenue such as extra amenities and services your hotel/lodge offers.

It is imperative to consistently and periodically calculate ADR, as it may change with time and the seasons of the year. ADR depends on many factors such as time of year, location or local events guests may attend.

 The ADR formula:

 Hotel ADR = Room revenue ÷ Rooms occupied

7 Strategies to Improve Your Hotel's ADR while keeping your operating costs low:

1. Offer Room service & Additional Guest Services

The more hotel amenities you provide – such as an onsite bar, room service, spa – the more money you stand to make from a guest’s stay. After all, what guest doesn’t want to stay in a place with luxury spa facilities and around-the-clock bottle service?

2. Build Guest Packages & Offer Promotions

Consumers are always looking for a good deal to make sure they feel like they’re getting the most for their buck. Consider strategically offering promotions to maintain a healthy occupancy rate year-round. Examples of promotions you can over include direct booking discounts or points for loyalty programs.

3. Use Local Tourism & Events

Take advantage of the tourist attractions in your surrounding area by catering to the tourists travelling to your area’s specialties. Consider when special events may occur or perhaps take note of stunning monuments nearby.

4. Improve Your Hotel's Online Reputation with Guest Reviews

In the hospitality industry, reputation is everything. Travellers are eager to review their experiences. Management should encourage reviews to establish a formidable online presence by creating a community of loyal supporters. Keep in mind that responding to bad reviews gives you the opportunity to remedy the situation and show that management cares about the hotel service.

5. Monitor Competitors

Your competitors are a good benchmark for measuring your successes and shortcomings. You need to understand what it is that makes you and your competitors stand out. Then, you can adjust your business strategy appropriately.

6. Optimise Your Hotel Rooms' Pricing

ADR is essential when it comes to deciding how much to charge for a room. Location, square footage, renovations, and fixtures all play a key role in the price you can charge.

7. Upsell Guests

Increase your ADR by upselling guests at or before check-in. You can offer them a room with a better view or square footage or try to upsell them on a dinner package.


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