Average rate index (ARI)

The average rate index (ARI) is a performance metric used in hospitality to measure how a property’s average daily rate (ADR) compares to the ADR of a competitive set of similar properties in the same market. 

ARI gives hotel managers and revenue teams insight into their pricing competitiveness and helps evaluate whether they capture fair value relative to competitors. 

To calculate the ARI, a hotel divides its ADR by the ADR of its competitive set. 

For example, if a hotel’s ADR is $120 and the market average is $100, its ARI is 1.2, indicating it charges 20 percent more than its competitors.