Average Daily Rate Calculator
Compute average daily rate from room revenue and occupied rooms for hospitality revenue analysis.
What Is Average Daily Rate (ADR)?
Average Daily Rate (ADR) is a key hotel performance metric that measures the average revenue earned per occupied room per day. It is one of the most widely used benchmarks in the hospitality industry alongside occupancy rate and RevPAR (Revenue Per Available Room).
ADR Formula
The ADR formula divides total room revenue by the number of rooms sold:
$$\text{ADR} = \frac{\text{Total Room Revenue}}{\text{Number of Rooms Sold}}$$
For example, if a hotel earned $15,000 in room revenue and sold 120 rooms, the ADR would be $125.
Why ADR Matters
ADR helps hotel managers and investors evaluate pricing strategy and revenue performance. A higher ADR indicates stronger pricing power, while trends over time reveal seasonal demand patterns and competitive positioning. Combined with occupancy rate, ADR forms the basis for calculating RevPAR, the most comprehensive single metric for hotel performance.
How to Improve ADR
- Dynamic pricing: Adjust rates based on demand, seasonality, and local events.
- Room type differentiation: Offer a range of room categories with distinct pricing tiers.
- Upselling: Promote room upgrades, packages, and amenities at booking.
- Direct bookings: Reduce OTA commission costs to retain more revenue per booking.
Frequently Asked Questions
What is a good ADR for a hotel?
A good ADR varies widely by market, star rating, and location. Budget hotels may average $60–$100 per night, while luxury properties can exceed $500. Always compare your ADR against local competitive set benchmarks rather than national averages.
What is the difference between ADR and RevPAR?
ADR measures revenue per occupied room, while RevPAR measures revenue per available room (including vacant ones). RevPAR = ADR × Occupancy Rate. RevPAR is generally considered a more complete measure of revenue performance because it accounts for both pricing and occupancy simultaneously.
Should complimentary rooms be included in ADR?
No. Complimentary rooms should be excluded from both the revenue numerator and the rooms sold denominator when calculating ADR, since they generate no revenue and would otherwise distort the metric downward.
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