ADR – Average Daily Rate

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

Calculation:

  • 100.000 โ‚ฌ revenue / 500 rooms = 200,00 โ‚ฌ ADR

House use and complimentary rooms are excluded from the denominators. โ€˜House Useโ€™ 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 donโ€™t have a concrete value to add.

See Also:

Synonyms:

  • ADR
  • Average Daily Rate

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About the Author:

As CEO and Founder of XOTELS, Patrick Landman has made it his mission to turn hotels and resorts into local market leaders. XOTELSยด diverse expertise and deep-knowledge across revenue management consulting, hotel management, and hotel consulting, enables us to drive results for independent boutique hotels, luxury resorts, and innovative lodging concepts. Below you will find opinion articles written by Patrick Landman.