ADR (Average Daily Rate) refers to the average rental income generated per occupied room in a hotel, per day. It’s a key metric used in the hospitality industry to measure the performance of a hotel and to benchmark it against others in the market. ADR takes into account the total room revenue and divides it by the number of occupied rooms, giving an average rate for each room per day. It provides an indication of the hotel’s pricing strategy, demand for its rooms, and overall financial performance.
ADR can be calculated by dividing the total room revenue by the number of occupied rooms during a specific time period (usually a day or month).
Mathematically, it can be expressed as:
ADR = Total Room Revenue / Number of Occupied Rooms
For example, if a hotel generated $10,000 in room revenue from 100 occupied rooms in a day, its ADR would be $100 ($10,000 / 100 rooms).< Back