It is a Hotel KPI that measures the performance of their ADR compared to their comp set during the same period (competitive set: a group of other hotel brands and competitor that have a similar target market and concept).
How do you calculate ARI?
- $150 / $120 = 1.25
- ARI Index = 1.00 The hotel ADR is equal to the average ADR of their comp set
- ARI Index > 1.00 The hotel ADR is more expensive than the average ADR of their comp set
- ARI Index < 1.00 The hotel ADR is less expensive than the average ADR of their comp set
Depends on the occupancy rate, the hotel can choose to lower, equal or higher their ADR compared to the ADR or their comp set in order to gain more revenue and make themselves more competitive towards their competitors.