Hotel Revenue Glossary · Benchmarking

ARI (Average Rate Index)

Your hotel's ADR divided by the comp set's average ADR, times 100. ARI shows whether you're commanding higher or lower rates than competitors.

Why it matters: ARI above 100 means your guests pay more than those at competing hotels. Below 100 means you're discounting relative to the market. Combined with MPI, it reveals your competitive strategy (rate-driven vs. volume-driven).

Worked example: You hold A$248 ADR against a comp set averaging A$220, so ARI is 248 / 220 x 100 = 112.7. Across 82 sold rooms a night that premium is 28 x 82 = A$2,296 nightly, or A$838,040 over a year. Match a competitor's A$9 undercut and ARI slips to 239 / 220 x 100 = 108.6 - A$738 a night gone, and three more rooms to sell just to stand still.

Common mistake: Reading ARI as a verdict on your pricing. An ARI of 92 at a hotel carrying a 40-room crew contract is a statement about mix, not about discounting - that rate is fixed by agreement and cannot move this week. Strip the contracted nights out and compare retail ADR like for like first.

All glossary terms MPI (Market Penetration Index) RGI (Revenue Generation Index) ADR (Average Daily Rate)