What Is Average Daily Rate?
Average Daily Rate (ADR) is a key performance indicator in the hospitality industry that measures the average revenue earned per occupied room per day. It is calculated by dividing total room revenue by the number of rooms sold during a given period.
ADR is one of three core hotel metrics, alongside occupancy rate and RevPAR (Revenue Per Available Room). Together, they provide a comprehensive view of a property's revenue performance.
ADR Formulas
Industry Benchmarks
| Property Type | Typical ADR | Occupancy |
|---|---|---|
| Budget Hotel | $60 - $100 | 65-75% |
| Mid-Scale Hotel | $100 - $180 | 70-80% |
| Luxury Hotel | $250 - $500+ | 60-75% |
| Vacation Rental (Airbnb) | $80 - $250 | 50-70% |
Frequently Asked Questions
How is ADR different from RevPAR?
ADR measures revenue per occupied room only, while RevPAR measures revenue across all available rooms (occupied and unoccupied). RevPAR = ADR x Occupancy Rate. A hotel can have a high ADR but low RevPAR if occupancy is low.
How can I increase ADR?
Strategies include dynamic pricing (adjusting rates by demand), upselling room upgrades, offering premium packages, improving property quality, optimizing your listing descriptions, and reducing reliance on discount channels.
Should I focus on ADR or occupancy?
The ideal strategy balances both. RevPAR is the best overall metric because it accounts for both rate and occupancy. Sometimes lowering ADR slightly to boost occupancy can increase total revenue. Use RevPAR to measure the net effect.