A rate based on total daily sales divided by the total number of rooms sold is known as what?

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Get ready for the DECA Hospitality and Tourism Test. Study with flashcards and multiple choice questions, each question includes hints and explanations. Prepare for your assessment!

Multiple Choice

A rate based on total daily sales divided by the total number of rooms sold is known as what?

Explanation:
Average daily rate measures the price guests actually pay per occupied room. It’s calculated by taking the total room revenue for the day and dividing it by the number of rooms sold. That exactly matches the description in the question, so this is the term you’re looking for. RevPAR uses total room revenue divided by total rooms available, which includes vacant rooms, so it’s different. Occupancy rate is the proportion of rooms sold to rooms available, not a rate per occupied room. Gross operating profit is a profitability figure, not a rate per room.

Average daily rate measures the price guests actually pay per occupied room. It’s calculated by taking the total room revenue for the day and dividing it by the number of rooms sold. That exactly matches the description in the question, so this is the term you’re looking for. RevPAR uses total room revenue divided by total rooms available, which includes vacant rooms, so it’s different. Occupancy rate is the proportion of rooms sold to rooms available, not a rate per occupied room. Gross operating profit is a profitability figure, not a rate per room.

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