Average Daily Rate (ADR) is a key hotel performance metric that measures the average revenue earned per occupied room in a given period.
It is calculated by dividing total room revenue by the number of rooms sold, excluding complimentary or out-of-order rooms.
ADR helps hoteliers evaluate pricing strategies, monitor market positioning, and assess financial performance. It indicates how effectively a hotel generates revenue from its occupied rooms.
Front office managers and revenue teams use ADR to adjust room rates, forecast revenue, and benchmark against competitors. ADR is often analysed alongside Occupancy Rate and RevPAR (Revenue per Available Room) to provide a complete view of revenue performance.
PMS and RMS systems automatically calculate ADR, enabling managers to make data-driven pricing decisions.
A high ADR does not necessarily translate into higher profit. If occupancy drops significantly, total revenue may decline. The ideal balance depends on the hotel’s market segment and demand patterns.
