Average Daily Rate (ADR): Hotel Metric Explained
Jun 29, 2026
What Is Average Daily Rate?
Average Daily Rate (ADR) is a key performance metric 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.
Formula: ADR = Total Room Revenue ÷ Number of Rooms Sold
Why ADR Matters
ADR helps hoteliers understand pricing effectiveness independent of occupancy. A high occupancy with low ADR might indicate heavy discounting, while low occupancy with high ADR could signal pricing too aggressive for the market.
ADR vs. RevPAR
While ADR measures average revenue per sold room, RevPAR (Revenue Per Available Room) factors in occupancy. Both metrics together give a complete picture of room revenue performance.
Example: 100 rooms, 80 sold at $150 average = ADR $150, RevPAR $120 (80 × $150 ÷ 100)
Improving ADR
• Dynamic pricing based on demand• Value-added packages instead of discounts• Upselling at booking and check-in• Segment-based pricing (corporate, leisure, group)