What is the difference between ARR and ADR?

ARR stands for average room rate while ADR stands for average daily rate. ARR and ADR are the same when looking at a single day, but they differ when looking at a period total. ARR is used within PMI as it is more relevant when looking at a longer period of time. Using ARR gives a better view of the period, as otherwise, days with low room nights will skew the period result.

• ARR is the sum of all revenue during the period, divided by the total number of rooms sold for the period.
• ADR is the average of each day’s ARR/ADR for the period.

Please see the chart below for more details.

Example – One week of actuals: