function calculateHotelADR() {
// Get input values
var revenueInput = document.getElementById('roomRevenue').value;
var roomsInput = document.getElementById('roomsSold').value;
var resultDiv = document.getElementById('adrResult');
// Parse values
var revenue = parseFloat(revenueInput);
var rooms = parseFloat(roomsInput);
// Validation
if (isNaN(revenue) || revenue < 0) {
resultDiv.innerHTML = "Please enter a valid amount for Total Room Revenue.";
return;
}
if (isNaN(rooms) || rooms <= 0) {
resultDiv.innerHTML = "Please enter a valid number of rooms sold (must be greater than 0).";
return;
}
// Calculation
var adr = revenue / rooms;
// Formatting result
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 2
});
// Display Result
resultDiv.innerHTML = "Average Daily Rate:" + formatter.format(adr) + "";
}
How to Calculate Average Daily Rate (ADR) in Hotels
The Average Daily Rate (ADR) is one of the most critical Key Performance Indicators (KPIs) in the hospitality industry. It measures the average rental income per paid occupied room in a given time period. Along with RevPAR (Revenue Per Available Room) and Occupancy Rate, ADR helps hoteliers analyze room revenue performance and develop effective pricing strategies.
The ADR Formula
To calculate the Average Daily Rate, you need two specific data points: the total revenue generated from room sales and the total number of rooms actually sold (occupied) during that same period.
ADR = Total Room Revenue / Number of Rooms Sold
Note: Complimentary rooms (rooms given for free) and house use rooms are typically excluded from the denominator (Number of Rooms Sold) to avoid artificially lowering the ADR.
Step-by-Step Calculation Example
Let's look at a realistic scenario for a boutique hotel to understand how the numbers work.
Scenario: A hotel has 100 rooms total.
Date: Friday Night.
Rooms Sold: 85 rooms were booked and paid for.
Total Room Revenue: The hotel collected $12,750 in room charges for that night.
Using the calculator above or the formula manually:
$12,750 (Revenue) รท 85 (Rooms Sold) = $150.00
The ADR for that Friday night is $150.00.
Why is ADR Important?
Monitoring your ADR allows for better revenue management decisions:
Competitor Benchmarking: Comparing your ADR to a competitive set helps you understand your market positioning.
Pricing Strategy: If your occupancy is 100% but your ADR is low compared to the market, you might be underpricing your rooms. Conversely, low occupancy with high ADR might suggest overpricing.
Trend Analysis: Tracking ADR year-over-year helps identify seasonal trends and the health of the business.
Difference Between ADR and RevPAR
It is common to confuse ADR with RevPAR, but they measure different things. ADR only tells you the average price paid for the rooms that were actually sold. It does not account for empty rooms.
RevPAR (Revenue Per Available Room) accounts for the total inventory, including unsold rooms. Therefore, RevPAR provides a holistic view of how well the hotel is filling rooms at a given price point.