How to Calculate Potential Average Rate Single and Double Rate
One of the main computations involved in the front office or revenue management is to calculate the hotel’s yield statistics.
Calculating potential average rates in hotels is an important aspect of revenue management. SingleA guest room assigned to one guest/pax. In beverage operations; a drink prepared with the standard m... and double rates are two common types of rates that hotels offer to guests.
To calculate the potential average rate for a single rate room, you simply add up the total revenue earned from the single rate rooms and divide it by the number of single rate rooms sold. This will give you the potential average rate for the single rate rooms.
Similarly, to calculate the potential average rate for a double rate room, you add up the total revenue earned from the double rate rooms and divide it by the number of double rate rooms sold. This will give you the potential average rate for the double rate rooms.
It is important to regularly calculate potential average rates for both single and double rate rooms in order to make informed decisions about pricing and revenue management strategies. By understanding these rates, hotels can adjust their pricing to maximize revenue and profitability.
The potential Average Rate provides the amount of revenue that would have been generated if all the rooms were sold at their published or rack rate. For hotels where their single rate and double rate for all room types are the same then the PARPAR (Potential Average Rate) = Room Revenue at Published Tariff or Rack Rate / Number of Rooms sold.... for Single and double will be the same as their Rack rate. But in most of the hotels the single rate changes as per room category or type. In such cases an average single rack rate is to be calculated.
The Formula for Potential Average Single Rate
Potential Average Single Rate = Single Room Revenue at Published Tariff or Rack RateThe published tariff for each room type/category in a hotel. / Number of Rooms sold as singles
Potential Avg. Single or DoubleA guest room assigned to two people. In beverage operations; a drink prepared with twice the standar... Rate Calculator
Example 1 – Potential Avg. Single Rate (Where the single rate is same for all room types):
Total Number of Rooms sold in Single = 25
Rack Rate / Published Tariff for Single = 125.00
Single Room Revenue at Published Tariff = 25 * 125.00
= 3125.00
Potential Avg. Single Rate for 01st Jan 2017 = 3125.00 / 25
= 125.00
Example 2 – Potential Avg. Single Rate (Where the single rate varies as per room types):
Deluxe Room – Rack Rate / Published Tariff for Single = 125.00
Deluxe Room Number of Rooms Available in the hotel = 100
= 125.00 * 100
= 12500.00
Suite1) A guest room with a parlour/living area in addition to a sleeping room and perhaps a kitchenette.... Room – Rack Rate / Published Tariff for Single = 168.00
Suite Room Number of Rooms Available in the hotel = 30
= 168.00 * 30
= 5040.00
Single Room Revenue at Published Tariff = (12500.00 + 5040.00)
= 17540.00
Potential Avg. Single Rate for 01st Jan 2017 = 17540.00 / 130
= 134.92
Formula for Potential Average Double Rate
Potential Average Double Rate = Double Room Revenue at Published Tariff or Rack Rate / Number of Rooms sold as Double
Example 1 – Potential Avg. Double Rate (Where the Double rate is same for all room types):
Total Number of Rooms sold in Double = 55
Rack Rate / Published Tariff for Double = 175.00
Double Room Revenue at Published Tariff = 55 * 175.00
= 9625.00
Potential Avg. Double Rate for 01st Jan 2017 = 9625.00 / 55
= 175.00
Example 2 – Potential Avg. Double Rate (Where the Double rate varies as per room types):
Deluxe Room – Rack Rate / Published Tariff for Double = 185.00
Deluxe Room Number of Rooms Available in the hotel = 100
= 185.00 * 100
= 18500.00
Suite Room – Rack Rate / Published Tariff for Double = 215.00
Suite Room Number of Rooms Available in the hotel = 30
= 215.00 * 30
= 6450.00
Double Room Revenue at Published Tariff = (18500.00 + 6450.00)
= 24950.00
Potential Avg. Double Rate for 01st Jan 2017 = 17540.00 / 130
= 134.92
