ARR Full Form in Hotel is Average Room Rate. It’s the amount of money a hotel can expect to make from a guest staying in a booked room for a specific amount of time. The average daily rate (ARR) is a key performance indicator for hotel managers.
It’s useful for managers deciding on room rates, occupancy phases, and expansion plans. It is determined by dividing overall revenue for the period in question by the average daily rate per available room for that time period.
This term “average room rate” refer to the typical cost of a hotel room for a given time. Income per available room is determined by dividing total income by the number of rooms booked during the specified time period.
Maximum income and profit for the hotel chain can be achieved with a healthy rate of occupancy and an ARR that is just right. The following methods can be used to lower your property’s ARR if it is too high:
Adding extra basic rooms to your hotel to increase the amount of rooms you can rent for less money
Day-of-the-week discounts (like free breakfast on the weekends)