The Best Available Rate (BAR) is the fundamental pricing unit in hotel revenue management. It represents the lowest non-restricted rate available to the general public for a specific room type on a specific date. Unlike negotiated corporate rates or tour operator rates, BAR fluctuates based on demand, occupancy, and market conditions.
Calculating the correct BAR is essential for profitability. If the rate is too high, you lose occupancy to competitors; if it's too low, you leave money on the table. This calculator uses a "Bottom-Up" approach (Cost-Plus Pricing) to determine the minimum rate required to cover costs and achieve a desired profit margin at a specific occupancy level.
Hotel BAR Rate Estimator
Please enter valid positive numbers. Occupancy must be greater than 0.
Expected Rooms Sold:–
Total Daily Cost (Fixed + Var):–
Breakeven Rate (Cost per Sold Room):–
Recommended BAR Rate:–
function calculateBAR() {
// 1. Get Inputs
var fixedCosts = parseFloat(document.getElementById('fixedCosts').value);
var variableCosts = parseFloat(document.getElementById('variableCosts').value);
var totalRooms = parseFloat(document.getElementById('totalRooms').value);
var occupancyRate = parseFloat(document.getElementById('occupancyRate').value);
var markup = parseFloat(document.getElementById('markup').value);
var errorMsg = document.getElementById('errorMsg');
var resultBox = document.getElementById('resultBox');
// 2. Validate Inputs
if (isNaN(fixedCosts) || isNaN(variableCosts) || isNaN(totalRooms) || isNaN(occupancyRate) || isNaN(markup) ||
fixedCosts < 0 || variableCosts < 0 || totalRooms <= 0 || occupancyRate <= 0 || markup < 0) {
errorMsg.style.display = 'block';
resultBox.style.display = 'none';
return;
}
errorMsg.style.display = 'none';
// 3. Calculation Logic
// Calculate number of rooms expected to be sold
var roomsSold = totalRooms * (occupancyRate / 100);
// Calculate total variable costs based on rooms sold
var totalVariableCost = roomsSold * variableCosts;
// Calculate total operational cost for the day
var totalDailyCost = fixedCosts + totalVariableCost;
// Calculate Breakeven Rate (Cost per Occupied Room)
// This is the rate needed just to cover costs at this occupancy level
var breakevenRate = totalDailyCost / roomsSold;
// Calculate BAR (Best Available Rate)
// Adding the profit markup to the breakeven rate
var barRate = breakevenRate * (1 + (markup / 100));
// 4. Display Results
document.getElementById('resRoomsSold').innerText = Math.round(roomsSold);
document.getElementById('resTotalCost').innerText = "$" + totalDailyCost.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resBreakeven').innerText = "$" + breakevenRate.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resBAR').innerText = "$" + barRate.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
resultBox.style.display = 'block';
}
Understanding the Calculation Components
To accurately calculate your hotel's Best Available Rate using the cost-plus methodology, you need to understand the variables entered above:
1. Total Daily Fixed Costs
These are the operational costs that do not change regardless of how many guests are staying in the hotel. Examples include staff salaries (front desk, admin), utilities (lighting in common areas, heating), insurance, software licenses, and property taxes. You should calculate the annual total and divide by 365 to get the daily figure.
2. Variable Cost Per Room (CPOR)
CPOR (Cost Per Occupied Room) refers to expenses incurred only when a room is sold. This includes housekeeping labor per room, laundry costs for linens/towels, room amenities (soap, shampoo), and guest breakfast costs if included. Accurate CPOR is crucial for ensuring your rate covers the marginal cost of selling the room.
3. Forecasted Occupancy
Hotel pricing is dynamic. As occupancy decreases, the fixed costs must be spread across fewer paying guests, which mathematically raises the breakeven point per room. Conversely, high demand allows you to distribute fixed costs more widely. Revenue managers adjust BAR rates based on forecasted demand curves.
4. Markup / Profit Margin
Once you know your breakeven point, you must add a markup to generate profit. This percentage depends on your hotel's strategy, market positioning, and competitor rates (CompSet). Luxury hotels often command higher markups than budget accommodations.
Advanced BAR Pricing Strategies
While the calculator above uses a cost-based foundation, modern revenue management typically combines this with market-based logic:
Dynamic Pricing: Adjusting the BAR multiple times per day based on real-time pickup pace.
Length of Stay (LOS) Restrictions: Implementing minimum stay requirements on high-demand dates to maximize total revenue (RevPAR).
Competitor Rate Shopping: Ensuring your BAR maintains its value proposition relative to your direct competitors.
Frequently Asked Questions
Does BAR include breakfast?
Typically, BAR is a "Room Only" rate unless specified otherwise. However, many hotels offer a "BAR with Breakfast" which is simply the standard BAR plus the cost of breakfast and a small margin.
How often should I update my BAR?
In a dynamic market, rates should be reviewed daily. Automated Revenue Management Systems (RMS) update rates in real-time based on algorithm changes in supply and demand.
What is the difference between BAR and ADR?
BAR is the asking price for a room at a specific moment. ADR (Average Daily Rate) is the historical average of the actual rates paid for rooms sold. Your goal is to manage BAR effectively to maximize your final ADR.