You have only listed 9 rooms, not 10. Given that, the total if all rooms are sold would be $1135, not $1335. Thus the ADR would be $126.11.
opps..let's try this again
10 rooms
2 King @ $135
4 Queens @ $125
4 Doubles @ $125
Total $1270 per night if all rooms sold. So...........ADR is $127.00 correct? 1270/10
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Correct. But note that there is an inherent assumption that you are selling all 10 rooms every night at full rate with no discounts.
I tend to think of ADR as something calculated "after the fact," as in you look at the total room revenue for some period of time, and divide by the number of room nights sold in that same period. Assuming the period is representative (big assumption), you can then use the ADR for forward-looking projections. It may be more useful for comparing different past periods, or for comparing different properties for the same past period (assuming the different properties use the same assumptions in calculating their ADR and occupancy figures!).
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Thank you that explanation.
Because this property is a foreclosed property, no real data is available prior to the bank taking it back. They did higher a Hotel Management service to come in and keep it active so it would sell better.
We are being directed by our SBA and SCORE Reps to use the ADR calc to show potential income at various Occupant rates so the bank can see the break even point (and we can too) for loan package.
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OK, in the worst case scenario, 50% occupancy with 10 rooms over 365 nights, all 1825 room nights are in queen or double rooms (king rooms never sold), so ADR would be $125.
In the best case scenario, both king rooms were sold every night of the year (730 room nights), with the queen and double rooms making up the rest (1095 room nights, total 1825 room nights), your ADR would be $129.
So under these two scenarios, total room income would range between $228,125 to $235,425. Some inherent assumptions are that your rates are constant year round, that you never discount, and that you really do achieve 50% occupancy, or 1825 sold nights.
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