Average Rate Index (ARI)
The Average Rate Index (ARI) evaluates a hotel’s pricing power by comparing its achieved Average Daily Rate against the weighted average ADR of its direct competitive set.
Why It Matters for Independent Operators
An ARI above 100 demonstrates premium pricing power relative to peers; an ARI below 100 indicates rate discounting or perceived quality deficit.
Practical Scenario & Calculation
[Illustrative Scenario] Your resort achieves an ADR of ₹7,500 while competitor properties average ₹6,250. ARI = (₹7,500 / ₹6,250) × 100 = 120.
How Operators Can Apply This Concept
Pair ARI with MPI. If ARI is 125 but MPI is 70, your rates may be priced beyond guest willingness to pay, suppressing total RevPAR.
Common Misunderstanding to Avoid
Maintaining an ARI of 100 does not mean matching competitor rates every day. It measures achieved average realized rates across market segments.
Hotel ADR Trend & Yield Analyzer
Compare entered monthly ADR, occupancy and room revenue, with day-weighted annual yield and illustrative pricing scenarios.