If room revenue is $65,500 and the total number of rooms sold is 520, what is the average daily rate?

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Prepare for your UCF HFT1000 Introduction to Hospitality and Tourism Industry Exam. Study effectively with flashcards, multiple choice questions, and detailed explanations. Boost your confidence and pass the exam!

To find the average daily rate (ADR), you can use the formula:

[ \text{ADR} = \frac{\text{Total Room Revenue}}{\text{Total Number of Rooms Sold}} ]

In this case, the total room revenue is $65,500 and the total number of rooms sold is 520.

Plugging the values into the formula gives:

[ \text{ADR} = \frac{65,500}{520} ]

Calculating that:

[ \text{ADR} = 125.96 ]

When rounded to two decimal places, this value is approximately $125.90.

This calculation is key in the hospitality industry as the average daily rate provides insight into revenue management and pricing strategies. The correct answer reflects the calculated average, which is vital for hotel operators to analyze their performance and adjust pricing accordingly. Understanding ADR helps in making informed decisions about how to increase revenue and optimize room rates, which is essential for profitability in the hospitality industry.