Revenue

ADR

Average Daily Rate

ADR (Average Daily Rate) is the average price a hotel actually achieved per room sold over a given period. It measures pricing performance on its own, with occupancy deliberately excluded.

Formula

ADR = Room revenue ÷ Rooms sold

ADR is calculated from rooms actually sold, not rooms available, so empty rooms never drag it down. That is the point: it isolates how well the hotel priced the rooms it did sell, which makes it the cleanest read on rate strategy, channel mix and discounting discipline.

Complimentary rooms and house-use rooms are normally excluded from both the revenue and the room count, since including them would understate the achieved rate. Practice varies, so ADR figures are only comparable when both properties treat these the same way.

ADR is most useful read beside occupancy. Rising ADR with falling occupancy usually means the hotel is pricing above what the market will absorb; rising occupancy with falling ADR usually means it is buying volume with discount. RevPAR is the metric that resolves the tension.

Worked example

A hotel sells 90 rooms in a night for €18,000 in total room revenue. ADR for that night is €200.

Frequently asked questions

What is ADR in hotels?

ADR (Average Daily Rate) is the average price a hotel actually achieved per room sold over a period. It is calculated from rooms sold rather than rooms available, so empty rooms never drag it down — which makes it the cleanest read on pricing and discounting discipline.

How do you calculate ADR in a hotel?

Divide room revenue by the number of rooms sold. A hotel selling 90 rooms for €18,000 in a night has an ADR of €200. Complimentary and house-use rooms are normally excluded from both figures, since including them would understate the rate the hotel actually achieved.

What does ADR stand for in hotels?

ADR stands for Average Daily Rate. It measures pricing performance on its own, with occupancy deliberately excluded. Read beside occupancy it shows whether a hotel is pricing above what the market will absorb, or buying volume with discount; RevPAR resolves the tension between the two.

Related terms

  • RevPAR — RevPAR (Revenue Per Available Room) measures how much room revenue a hotel earns for every room it has available, whether or not that room was sold. It combines rate and occupancy into a single number, which is why it is the most widely used performance metric in hotel revenue management.
  • Occupancy Rate — Occupancy rate is the percentage of a hotel’s available rooms that were actually sold in a given period. It measures how much of the inventory the hotel managed to fill, independent of what it charged.
  • Rack Rate — The rack rate is a hotel’s official published price for a room type before any discount, promotion or negotiated agreement is applied. It is the ceiling from which almost every rate a guest actually pays is discounted.
  • Yield Management — Yield management is the practice of continuously adjusting room rates and availability by segment and channel to extract the most revenue from a fixed, perishable inventory of rooms.