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What is Average Rate Index (ARI)?

The Average Rate Index (ARI) is a metric used in the vacation rental and hotel industry to measure the average rate at which a property or room is rented. It is calculated by taking the total revenue generated by a property or room over a given period of time and dividing it by the total number of nights that the property or room was occupied during that period.

The ARI is often used as a benchmark to measure the performance of a property or room, and it can be a helpful tool for comparing the rates of different properties or rooms within a market or region. It can also help property owners and managers identify market trends and adjust their pricing strategies accordingly.

The ARI is not the same as the Occupancy Rate (OR), which is calculated by taking the number of nights a property or room occupies and dividing it by the total number of nights available for rent during a given period. While the Occupancy Rate measures the demand, the ARI measures the pricing of the property, and both can be useful when evaluating the performance of a property.

It’s important to note that the ARI can fluctuate depending on various factors, such as location, time of year, and other external factors. Thus, it’s essential to consider the context when interpreting the ARI. For instance, during peak season, the ARI may be higher than in the low season, or a property in a high-demand location typically has a higher ARI than one in a less popular location.

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