Benchmarking

If you work in the hotel business, acronyms are part of the job. Among the many shorthand terms we use, two are particularly important for measuring performance. Their names might strike a similar chord, but delving into these respective metrics reveals crucial distinctions.

What is Average Daily Rate (ADR)? 

Average daily rate (ADR), one of the three key hotel performance indicators (along with occupancy and RevPAR), is the measure of the average paid for rooms sold in a given time period.

Good decisions can be made with high-level information. Optimal decisions come when you have comprehensive information. That is why hotel owners and operators are best positioned to grow their business when they gain detailed insight into the competition.

Performance benchmarking is paramount in the hospitality industry, and whether measuring success against yourself, the competition or a specific segment of the market, the process involves foundational historical metrics. 

• How to calculate RevPAR (Formula and Examples)
• What is the relationship between ADR and RevPAR?
• How to use RevPAR
• The Role of RevPAR in Profitability

Hotel benchmarking is the process of comparing your property's or portfolio’s performance against the competition, adding a layer of context to what success and failure looks like in your circumstances and environment.

Hotel benchmarking can help you answer questions such as: