Average Daily Rate (ADR)

Average Daily Rate or ADR is one of the main hotel revenue management KPIs that shows the average rental revenue per occupied room at a given time. To find the ADR, total room revenue for a particular day is divided by the number of rooms sold that day.

In other words, ADR is calculated to understand how much money each room brings on average. If its value increases throughout time, it typically reflects the increase in profitability.  

However, ADR only displays the room-specific revenue and doesn’t take into account unsold rooms, revenue that comes from other sources (bar, spa, restaurant, tours, etc.), or the associated costs. So it can’t provide the complete picture of the property’s financial performance.