Glossary / ADR

ADR(Average Daily Rate)

Average daily rate (ADR) is the average room revenue earned per occupied room in a period. It is calculated as room revenue divided by rooms sold. ADR shows pricing power, but it should be read with occupancy and RevPAR because rate increases can hurt total revenue if too many rooms go unsold.

Formula

ADR = Room revenue / Rooms sold

Example

If a hotel earns $18,000 from 120 occupied room nights, ADR is $150. If ADR rises to $170 but occupancy drops sharply, RevPAR may reveal that the higher price reduced total yield.

Why it matters

ADR helps hospitality operators understand room pricing and seasonality. It is most useful when paired with occupancy, RevPAR, channel mix, and booking-window trends.

Related terms

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