ADR in all-inclusive hotels: separating room and board revenue

ADR (average daily rate) is room revenue divided by rooms sold. In an all-inclusive hotel the package price also buys board, so package revenue divided by rooms sold is a package figure, not ADR. Agree a fixed room-and-board split with your accountant, convert per-person rates to per-room, and report both numbers side by side.

A resort sells a week for one price per person, board included. The owner asks for ADR, the accountant asks how the price splits between room and board, and both answers have to come out of the same contract, in the same month, without moving. This article gives you the definitions, the conversion steps, the split options, the exchange-rate rule and a reporting layout, so you can put a defensible room ADR next to a package figure and defend both.

Why is package revenue divided by rooms sold not room ADR?#

Because ADR counts room revenue only, and a package price is not room revenue. Dividing the whole package by rooms sold gives a real and useful number, but it is package revenue per occupied room, and it moves with things that have nothing to do with your room pricing.

ADR answers one question: what did one occupied room earn from the room itself on an average night. The package figure answers a different question: what did one occupied room earn in total, board and services included. Both are legitimate; the error is one number wearing two names.

The package figure moves with meal and beverage cost inflation, the board basis mix (bed and breakfast, half board, full board, all-inclusive, ultra all-inclusive), child reductions, length of stay and the exchange rate. Room ADR moves with room pricing, room type mix, discount policy and channel mix. If the two are confused, a food-cost problem shows up as a room-pricing problem, and a room-rate increase looks like it failed because board costs rose in the same month.

The confusion also breaks comparison. A city hotel reporting room-only ADR and a resort reporting package revenue per occupied room are not on the same scale, so neither an owner nor a lender can read them together. The fix is not to pick one. It is to name both precisely, define each once, and print them next to each other so the reader sees which question each answers.

Only the first row is ADR. The formulas behind the first and last rows are covered in more detail in RevPAR, ADR and occupancy rate: formulas and common mistakes.

How do you turn a per-person contract rate into a per-room figure?#

Multiply the per-person rate by the persons actually occupying the room, apply the reductions the contract allows, then apply the room-and-board split. Do it in that order, and do the same order every time.

Read the contract basis first. A rate can be per person per night, per room per night or per person per stay, and the board basis and validity dates sit next to it. Converting before you know the basis is where most errors start.

Use the actual occupancy mix, not the double room the contract assumes. A week at 1.7 persons per room earns very differently from a week at 2.0, at the same per-person rate. Handle children explicitly: a child reduction or a free child changes revenue without changing rooms sold, so it pushes the package figure down while room ADR stays flat. Decide whether the split is applied before or after reductions, write that down, and never switch mid-year.

Attribute extra beds, third and fourth adult supplements and the single supplement by the agreed rule. They are usually room revenue, but the point is that the rule is stated rather than assumed. Cross-check the arithmetic at the end: room revenue for the period must equal rooms sold multiplied by room ADR, and package revenue must equal the sum of room and board revenue. If either fails, the conversion is wrong, not the ledger.

How should a hotel separate room and board for management reporting?#

Pick one of three approaches, agree it in writing with your accountant, and treat it as a reporting convention rather than a tax method. A fixed percentage split is the simplest; a cost-based split tracks reality but moves with food prices; component allocation is the most defensible and the most work.

A fixed percentage split means the accountant and the owner agree, for example, that 60 percent of package revenue is room and 40 percent is board. It is stable, easy to explain and easy to audit internally, and it does not drift when the menu changes. A cost-based split allocates actual food and beverage cost plus an agreed margin to board, and the remainder to rooms; it follows reality, but the room figure then moves whenever food prices move, which is exactly the confusion you are trying to remove. Component allocation values each element at its own selling price and allocates the package price in proportion; it is the most defensible to an owner or a lender and the most labour, and it needs its price list reviewed every season.

Whatever you choose, it is a management reporting convention. The invoice, the accommodation tax and value added tax follow their own rules. Know the scope you are not changing: the accommodation tax applies to the overnight stay and to the other services sold with it inside the facility, such as food, drink, activities and entertainment, and it applies to board concepts such as bed and breakfast, half board, full board and all-inclusive even when those are priced separately or billed separately. The exact scope is set by law and by the tax administration's guidance, so confirm your own case with your accountant. A management split does not move board out of that scope.

If you report to an international brand, a lender or an institutional owner, USALI is the reference they will expect. Its 12th Revised Edition, with an adoption date of 1 January 2026, adds a section on reporting revenue and expenses for all-inclusive hotels, as the American Hotel & Lodging Association announced on 11 July 2024 (opens in a new tab). That is the closest thing to a shared convention the industry has. Put your chosen method on one page, dated and signed by the owner and the accountant, with an effective date and the person who may change it. How fiscal documents are issued alongside this reporting is its own topic, covered in ÖKC in hotel outlets: fiscal devices, room charges and invoices.

Which exchange rate should a hotel use for foreign-currency contracts?#

The hotel chooses, and then keeps the choice fixed. Currency regulation leaves the rate to the parties, and the Central Bank's indicative rates bind no one, so the only defensible rule is one the hotel writes down and applies every month.

First, whether the contract may be in foreign currency at all. Residents of Türkiye may not generally set the price of service contracts between themselves in foreign currency or indexed to it, but listed exceptions exist, and accommodation service contracts at facilities certified by the Ministry of Culture and Tourism are among them. Confirm your own contracts and channels with your legal adviser.

Second, the payment rate. Where a contract may lawfully be priced in foreign currency and the parties agree to pay in Turkish lira, they may choose freely which exchange rate to use for payment, and currency regulation places no obligation on that choice (same FAQ, item 2).

Third, what the Central Bank actually publishes. Indicative rates are announced at 15:30 on each business day, posted on the Central Bank's website the same day and printed in the Official Gazette the following day; no indicative rates are set on weekends, public holidays or half working days (TCMB, Indicative Exchange Rates, 2026). Fourth, what those rates mean: the Central Bank states that its indicative rates are not binding on any person or institution, and that the rates used in transactions between other parties are left to those parties (TCMB, Indicative Exchange Rates, 2026).

So the rule has three parts: which rate (Central Bank indicative, a bank's buying rate, or the contract rate), which day (booking, arrival, invoice or month end), and which time if the day is a business day. A rule that says only "the Central Bank rate" is not a rule, because it does not say which day. Keep the tax and invoicing conversion separate: the freedom the currency FAQ describes is about currency regulation, not about tax. Write the rule as one sentence in the report header, for example: "Foreign-currency figures are converted at the Central Bank indicative rate announced at 15:30 on the last business day of the month, applied to the whole month."

How do you report room ADR and package revenue per occupied room side by side?#

On one page, in one table, with the split percentage and the exchange-rate rule printed in the header. The reader should never have to ask which number is which.

Lead with volumes: rooms available, rooms sold, room-nights, person-nights. Every ratio below them is only readable against these. Then the money: room revenue, board revenue, package revenue, in one currency, converted under the stated rule. Then the ratios: room ADR, package revenue per occupied room, revenue per person-night, and RevPAR calculated on room revenue only.

Add a one-line movement note. If package revenue per occupied room rose while room ADR was flat, that is a board, mix or currency story, not a pricing win, and the note should say so before someone else does. Never let a spreadsheet column headed ADR hold the package figure; rename the column, even if it is inconvenient, because the label is what travels into the owner's board pack. Read the two numbers together with booking pace, so a rate decision can be judged against the pickup that followed it rather than against last month's total; see Hotel pickup report: how to read booking pace day by day. The wider context is in Hotel revenue management: a working guide for independent hotels.

Header line above the table: split percentage, exchange-rate rule, method memo version and date.

A week worked through (for example)#

Here is the whole calculation on one hypothetical week, so the order of the steps is visible. Every number is illustrative.

The setting, for example: a 40-room resort, one week in May, 200 room-nights sold, 340 person-nights, so 1.7 persons per room. The contract rate is 120 units of foreign currency per person per night on an all-inclusive basis, and the agreed split is 60 percent room, 40 percent board.

Package revenue: 340 person-nights multiplied by 120 gives 40,800. Room revenue: 60 percent of 40,800 gives 24,480. Board revenue: the remaining 16,320. Room ADR: 24,480 divided by 200 room-nights gives 122.40. Package revenue per occupied room: 40,800 divided by 200 gives 204.00. Revenue per person-night stays at 120 by construction, which is a useful check that the volumes are right.

Convert under the stated rule, for example at a month-end rate of 47.50 lira to the unit: room ADR becomes 5,814 lira and package revenue per occupied room becomes 9,690 lira. The rate is illustrative; the rule is the point.

Now change one thing. If the child mix rises so that person-nights fall to 310 at the same per-person rate, package revenue drops to 37,200 and package revenue per occupied room drops to 186.00, while room ADR falls only to 111.60 because the room share falls with it. Neither number is wrong; they are answering different questions, and the movement note should say which. Cross-check: 200 room-nights multiplied by 122.40 equals 24,480, and 24,480 plus 16,320 equals 40,800. If either check fails, the conversion is wrong.

How do you keep the method the same every month?#

Write it down once, version it, and reconcile it to the ledger every month. Consistency is not a personality trait here; it is a document.

The method memo holds five things: the definitions of room revenue, board revenue and package revenue; the chosen split and how it was derived; the exchange-rate rule with its rate, day and time; the rounding convention; and who may change the memo. Give it a version number and an effective date, and keep the old versions. When someone asks why last year's ADR was different, the answer should be a document, not a memory.

Reconcile monthly: room revenue in the report must tie to the room revenue line in the ledger, and the difference, if any, must be explained in one line rather than absorbed. Review the split once a year, or sooner if the board basis mix changes materially, for example a shift from half board to all-inclusive. If you change it, either restate the comparison period or mark the break clearly on the chart.

Make sure the night audit and finance teams use the same definitions as the memo, because the same word can mean three things across a resort's departments. Keep the memo short enough that a new controller can read it in five minutes. A method nobody reads is a method nobody follows.

What to do next#

Write the one-page method memo this month: definitions, split, exchange-rate rule, rounding, owner and accountant sign-off. Then report room ADR and package revenue per occupied room side by side, with the memo version in the header, so every later comparison is made against a number you can defend.