Average Daily Rate (ADR) Calculator
What is Average Daily Rate (ADR)?
In the hospitality industry, Average Daily Rate (ADR) is one of the most critical Key Performance Indicators (KPIs). It measures the average rental income per paid occupied room in a given time period. ADR is used to assess the financial performance of a hotel, resort, or short-term rental compared to its competitors and its own historical data.
The ADR Formula
The calculation for ADR is straightforward but essential for revenue management:
Note: Only rooms that generate revenue should be included in the "Rooms Sold" count. Complimentary rooms or staff rooms are typically excluded from this specific calculation to ensure the rate reflects actual market performance.
Example Calculation
Suppose your boutique hotel generated $12,500 in room revenue over a weekend. During that same period, you had 50 rooms booked and occupied by paying guests.
Calculation: $12,500 / 50 = $250.00
Your ADR for that weekend was $250.00 per room.
Why ADR Matters for Your Business
- Benchmarking: Compare your rates against the local market (CompSet) to see if you are underpricing or overpricing.
- Trend Analysis: Monitor how your rates change seasonally or during special events.
- Revenue Management: High ADR is generally positive, but it must be balanced with occupancy. A very high ADR with very low occupancy might result in lower total revenue than a moderate ADR with high occupancy.
ADR vs. RevPAR: What's the Difference?
While ADR tells you how much each sold room is worth, RevPAR (Revenue Per Available Room) tells you how much revenue you are making across all available rooms, including those that sit empty. ADR is a component used to calculate RevPAR.