If you're an event planner (or a hotel room consolidator or reseller), when you're dealing with hotels (and potentially other vendors), you'll likely hear the terms "net rate" and "net-net rate." The higher the ADR, the better. are some examples. Rooms used for in-house use, such as those set aside for hotel employees and complimentary ones, are excluded from the calculation. For example, if you're organizing an event for a client, you can purchase a block of rooms at a net rate for the client and then resell those rooms. Here's what "net rate" and "net-net rate" mean in the context of event planning and event management. An absentee owner is an individual who owns a building, apartment, shop, or another piece of real estate but does not live within the property's local area. Occupancy rates can also be applied to residential buildings, hospital beds, or even entire cities to gauge underlying economic activity and trends. The figure also does not subtract items such as commissions and rebates offered to customers if there is a problem. A "net-net rate" is the cost of a meeting or event excluding all elements that are considered commissionable to a third party and/or other markup fees. Meanwhile, RevPAR measures a lodging's ability to fill its available rooms at the average rate. The occupancy rate was fairly static at 75.8%. A power center is a large outdoor shopping mall that usually includes three or more big box stores, smaller retailers, and restaurants. In a call center, occupancy rate refers to the amount of time agents spend on calls compared to their total working hours. The average daily rate (ADR) is needed to calculate the revenue per available room (RevPAR). Both are critical terms you need to understand to negotiate the most favorable contracts. Free rooms for group coordinators applies to participating hotels only and required group size may vary … The net rate formula is most frequently applied to housing costs for guest rooms at hotels or resorts for meetings and events and includes food and beverage and catering costs. Hotels or motels can increase the ADR through price management and promotions. HotelPlanner.com will meet or beat any price on your group's travel needs when reserving 10 rooms per night or more at a hotel of equal or greater quality Read more. In Marriott's case, $202.75 times 75.8% equates to a RevPAR of $153.68, which was up 2.19% from 2018. The Meaning of 'Net Rate' Simply put, a "net rate" is the rate that the event organizer (or hotel room reseller) pays for services without any commission included. Revenue per occupied room is an industry metric used to evaluate companies in the hotel and lodging industries. Learn more about real estate. Residential rental property is a type of investment property that derives more than 80% of its revenue from dwelling units. In the net rate example, if the reseller offers customers a flat rate that includes tax, then any hotel or sales tax will come out of the reseller's profit. Because of this, apartment complexes, malls and other facilities with low occupancy rates often sell for less than similar properties with high occupancy rates. To determine the operating performance of a lodging, the ADR can be measured against a hotel's historical ADR to look for trends, such as seasonal impact or how certain promotions performed.