ADR Index Calculator — Average Daily Rate vs Comp Set

About the ADR Index Calculator — Average Daily Rate vs Comp Set

The ADR Index — also known as the Average Rate Index (ARI) — measures how your hotel's Average Daily Rate compares against the competitive set. It divides your ADR by the comp set's average ADR and multiplies by 100 to produce an index score. A score above 100 means you're commanding higher rates than competitors; below 100 means you're pricing lower.

ADR Index is one of three core performance indices used in STR (Smith Travel Research) benchmarking, alongside Occupancy Index (MPI) and RevPAR Index (RGI). Together, they paint a complete picture of how a hotel performs relative to its market.

This calculator computes your ADR Index and shows the dollar gap between your rate and the comp set average. Revenue managers use this metric to evaluate pricing strategy effectiveness and identify opportunities to either raise rates (if index is low with strong demand) or investigate why rates are disconnecting from the market.

When This Page Helps

Knowing your ADR in isolation is meaningless without market context. An ADR of $180 could be excellent in one market and poor in another. The ADR Index provides that context by benchmarking against competitors, telling you whether your pricing is above, at, or below market.

How to Use the Inputs

1. Enter your hotel's ADR for the period.
2. Enter the comp set average ADR for the same period.
3. Review the ADR Index score and rate gap.
4. An index above 100 indicates rate premium over the market.
5. An index below 100 indicates rate discount versus the market.
6. Track the index over time to spot pricing trends.

Example Calculation

Tips & Best Practices

• An ARI above 100 with occupancy below market suggests you may be pricing too aggressively.
• An ARI below 100 with occupancy above market indicates potential to raise rates.
• Track ARI by day of week to identify specific days where pricing diverges from the market.
• Compare ARI trends month over month to detect pricing drift.
• Use ARI alongside MPI and RGI for a complete competitive picture.
• If ARI consistently exceeds 110+, validate that your comp set is still appropriate.

ADR Index in the STR Performance Triad

STR reports provide three key indices: MPI (Market Penetration Index for occupancy), ARI (Average Rate Index for ADR), and RGI (Revenue Generation Index for RevPAR). The mathematical relationship is RGI = MPI × ARI ÷ 100. A hotel can excel on rate but underperform on RevPAR if occupancy lags, and vice versa.

Interpreting ADR Index Movements

A rising ARI means your rates are increasing faster than the comp set (or declining slower). This could reflect successful repositioning, renovations, or improved revenue management. A falling ARI warrants investigation — are competitors raising rates while you stay flat, or are you discounting more aggressively than necessary?

Strategic Use of ADR Index

Use ARI to set annual rate strategy. If your goal is market share growth, accept a lower ARI temporarily to drive occupancy. If profitability is the priority, push ARI higher and accept some occupancy trade-off. The right balance depends on ownership objectives and market conditions.

Frequently Asked Questions

• What is a good ADR Index?

  It depends on your strategy. A luxury hotel in its comp set should maintain an ARI of 105-120. A value-positioned hotel may intentionally maintain an ARI of 90-95 to drive higher occupancy.

• What data source provides comp set ADR?

  STR (now part of CoStar) provides competitive set reports showing comp set ADR, occupancy, and RevPAR. Your brand's revenue management team may also provide market data through internal reporting tools.

• How is the competitive set determined?

  A comp set typically consists of 5-7 hotels that compete directly for the same guests. They should be similar in class, location, and target market. STR helps hotels define appropriate comp sets.

• Can my ARI be too high?

  Yes. An ARI significantly above 100 may indicate overpricing if it's accompanied by a low MPI (occupancy index). The goal is to maximize RGI (RevPAR index), which balances rate and occupancy.

• How does ADR Index relate to RevPAR Index?

  RevPAR Index (RGI) = ADR Index (ARI) × Occupancy Index (MPI) ÷ 100. You can have a high ARI but low RGI if occupancy is significantly below the market.

• Should I compare ADR Index monthly or by specific dates?

  Both. Monthly gives trend insights, while specific date analysis helps optimize pricing for events, holidays, and recurring demand patterns.