Average Daily Rate (ADR)

How it is calculated

Divide room revenue by room nights sold for the same period. One room sold for three nights contributes three room nights, even when two people share it. Use one currency and a consistent room-revenue basis; breakfast and other service revenue should not simply be added to the numerator.

Keep the treatment of taxes, discounts, refunds and complimentary stays consistent between reports. If no room nights were sold, ADR is undefined. To aggregate a longer period, divide total room revenue by total room nights sold rather than taking a simple average of daily ADR values.

A hypothetical example

Suppose a month produced 210 room nights sold and €25,200 in room revenue. With both figures on the same reporting basis, ADR is €120. That does not mean every reservation cost €120 per night: room types, discounts and stay dates may have produced different actual rates.

What the result tells you

Two months can have the same number of room nights sold but different room revenue. ADR helps separate the effect of achieved rates from sales volume. Read it alongside occupancy and RevPAR, while keeping the property, season and room mix comparable.

An increase may reflect a larger share of premium apartments being sold, rather than a price increase for every room. Looking at the same unit type over time helps explain the difference.

When ADR is useful

Use ADR to compare achieved rates across similar rooms and periods. When the room mix changes, examine each room type separately as well. Read it alongside occupancy and RevPAR before deciding whether a price increase improved performance.

A common misunderstanding

A higher ADR does not automatically mean a stronger overall result. Fewer nights may have sold, or distribution and operating expenses may have increased. ADR measures room revenue, not profit. It also differs from average booking value, since a reservation can cover several nights or more than one room.