What does MAR stand for?

Minimum Acceptable Rate

"MAR" in the context of a hotel stands for "Minimum Acceptable Rate." This is a crucial pricing strategy and a key term in revenue management within the hospitality industry. It refers to the lowest rate at which a hotel is willing to sell a room or a group of rooms while still maintaining a desired level of profitability and protecting its brand image.

The Minimum Acceptable Rate (MAR) is not a fixed, static number; instead, it is dynamically determined by various factors. These factors typically include the hotel's operational costs per room, the current market demand, competitor pricing, and the hotel's desired profit margins. For instance, when considering a large group booking, the hotel might perform a "displacement analysis" to ensure that accepting the group's proposed rate won't result in a greater loss of potential revenue from individual (transient) bookings that might otherwise occupy those rooms at a higher rate. By establishing a MAR, hotels can effectively manage price fluctuations, optimize revenue, and strike a balance between achieving high occupancy rates and ensuring financial viability. It acts as a protective floor for pricing decisions, preventing rooms from being sold at rates that would be unprofitable or devalue the property.