Worksheet 1: Three Key Operating Ratios

Name Jerimae Francisco

RO % ADR RevPAR
MONDAY 40% PHP 8,450 PHP 3,380
TUESDAY 55% PHP 7,550 PHP 4,153
WEDNESDAY 60% PHP 6,480 PHP 3,888
THURSDAY 62% PHP 5,980 PHP 3,708
FRIDAY 80% PHP 9,250 PHP 7,400
SATURDAY 76% PHP 9,140 PHP 6,946
SUNDAY 45% PHP 4,570 PHP 2,057

SOLUTION:
MONDAY
1. RO (%)
238 X 100 238 X 100 ÷595 RO% =40%
595

2. ARD
2,011,100  2,011,100 ÷ 238 ADR= 8,450
238

3. RevPAR
40 X 8,450 = 3,380 RevPAR= 3,380
TUESDAY
1) RO%
330 X 100 330 X 100 ÷ 600 RO%= 55%
600

2) ADR
2,491,500  2,491,500 ÷ 330 ADR= 7,550
330

3) RevPAR
55 X 7,550 = 4,152.5 RevPAR= 4,153

WEDNESDAY
1) RO%

351 X 100 351 X 100 ÷585 RO%= 60%

585

2) ADR

2,274,480  2,274,480 ÷ 351 ADR= 6,480

351

3) RevPAR

60 X 6,480 = 3,888 RevPAR= 3,888

THURSDAY
1) RO%
 372 X 100 372 X 100 ÷600 RO%= 62%
600

2) ADR
2,224,560  2,224,560 ÷ 372 ADR= 5,980
372

3) RevPAR
62 X 5,980 = 3,708 RevPAR= 3,708

FRIDAY
1. RO%

480 X 100  480 X 100 ÷ 600 RO%= 80%

600

2. ADR
4,440,000  4,440,000 ÷ 480 ADR= 9,250
480

3. RevPAR
80 X 9,250 = 7,400 RevPAR= 7,400

SATURDAY
1. RO%
456 X 100  456 X 100 ÷ 600 RO%= 76%
600
 2. ADR

4,167,840 4,167,840 ÷ 456 ADR= 9,140

456

3. RevPAR

76 X 9,140 = 6,946.4 RevPAR= 6,946

SUNDAY
1. RO%

270 X 100  270 X 100 ÷ 600 RO%= 45%

600

2. ADR

1,233,900  1,233,900 ÷ 270 ADR= 4,570

270

3. RevPAR

45 X 4.570 = 2,056.5 RevPAR= 2,057

ANSWER:

And here the importance of ADR RO% and RevPAR in hotel operation

1. Importance of Average Daily Rate

 Average daily rate (ADR) is an important indicator because it reflects the

average price that customers are paying for hotel rooms on a given period of time
 It gives you a big advantage to maximize your income during the peak times of the
year and manage your assets during the quiet seasons.
 2. RevPAR is arguably the most important of all ratios used in the hotel industry. Because
the measure incorporates both room rates and occupancy, it provides a convenient
snapshot of a how well a company is filling its rooms, as well as how much it is able to
charge.

RevPAR certainly gives a more accurate and broader picture of any hotel's
performance, and is a key performance indicator when we evaluate the effectiveness of any
revenue management strategy.

3. Occupancy rates are important to business owners because they can signify success - or
failure - of the property in question. If a hotel that has consistently low occupancy rates

The occupancy rate can also be used to determine how successful the facility is
compared to its competitors, or how changes in pricing or marketing strategies impact its
business.