What is the meaning / definition of ADR in the hospitality industry?

ADR stands for: Average Daily Rate

It is a KPI used to calculate the average price or rate for each hotel room sold for a specific day.

It is one of the most common financial indicators to measure how successful the performance of the hotel is against other hotels that have similar characteristics such as size, clientele and location and/or its own previous figures.

How do you calculate ADR?

ADR Formula for Hotels, by Xotels

  • ADR Formula: ADR = Room Revenue / Rooms Sold


  • 100.000 € revenue / 500 rooms = 200,00 € ADR

House use and complimentary rooms are excluded from the denominators. ‘House Use’ rooms or those occupied by hotel employees or management are excluded as they are not available for sale and not generating income. Complementary rooms are also excluded since they don’t have a concrete value to add.

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