ADR, or average daily rate, is the average price an accommodation business charges for each room sold. It measures the quality of the rate achieved, not occupancy.
ADR, short for average daily rate, is the average revenue a hotel, rural guesthouse, aparthotel or other lodging business earns for each room actually sold during a period. It is a key revenue management metric because it shows whether the property is selling its rooms at a healthy rate or filling beds at the cost of destroying price. Unlike RevPAR, which divides revenue by all available rooms, ADR looks only at occupied rooms. That is why a high ADR does not guarantee profitability if occupancy is low, and a low ADR can hide a problem even when the hotel is full.
The useful approach is to read it together with occupancy, RevPAR, sales channel, commissions, cancellations, average length of stay and demand forecast. In the high season, ADR helps protect rates when demand allows you to charge more. In the low season, it helps measure whether promotions are generating volume without eroding the average price too much. It is also useful for comparing segments: direct guests, OTAs, groups, corporate clients, events, packages with food and drink, or last-minute bookings.
In mixed hospitality businesses, such as hotels with a restaurant, ADR should not be analysed in isolation from additional spend on the bar, breakfast, room service or events. A guest may pay slightly less for the room but generate more total revenue by using complementary services. Even so, ADR remains the starting point for understanding a property's pricing strategy.
ADR = Revenue from rooms sold / Number of rooms sold
To calculate ADR, add up the net revenue that comes only from rooms sold, excluding VAT and excluding extras such as breakfast, spa, restaurant, parking or tourist taxes, unless your internal analysis decides to split packages in a consistent way. Then divide that figure by the number of occupied rooms in the same period. If a hotel earns €18,000 in room revenue in one night and sells 120 rooms, its ADR is 18,000 / 120 = €150. If the same hotel has 160 rooms available, RevPAR would be 18,000 / 160 = €112.50.
This difference shows why ADR and RevPAR should be read together: one explains the price achieved per room sold and the other how well the whole available capacity is being monetised.
A 40-room boutique hotel reviews three nights in May. On Thursday it sells 24 rooms at an average of €115: ADR €115 and 60% occupancy. On Friday it sells 36 rooms at €132: ADR €132 and 90% occupancy. On Saturday it sells all 40 rooms at €128: ADR €128 and 100% occupancy.
Looking only at occupancy, Saturday would seem the best day. But when the team cross-checks ADR with demand, it finds that Friday protected the rate better and still had some room to sell more. For the next bank holiday weekend it decides to raise prices earlier on high-demand channels, limit last-minute discounts and hold back availability for direct sales. It also looks at the hotel restaurant: Friday's guests booked more dinners and wine, so total revenue per guest was higher.
The conclusion is not simply to raise prices, but to adjust rates by demand, channel and expected complementary spend.
ADR matters because a hotel room, like a restaurant table, is perishable inventory: if it is sold too cheaply on a high-demand day, that opportunity cannot be recovered tomorrow. Keeping an eye on ADR stops you competing on price alone, helps detect excessive reliance on intermediaries, measures the real impact of promotions and allows a more targeted commercial strategy. An ADR that falls while occupancy rises may point to aggressive discounting, badly priced packages or channels with too much commission. An ADR that rises but cuts occupancy too far may signal prices out of line with the market.
Professional management looks for balance: protecting the rate when there is enough demand and pulling commercial levers when the forecast drops.
Zindra helps you analyse ADR as part of a complete view of the business: sales, bookings, occupancy, RevPAR, forecasting, channels, costs, the restaurant and financial reporting. You can compare periods, segments and properties, see whether a promotion really improves the margin and set prices with connected data, rather than instinct or pressure to fill rooms.
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Yield management is the strategy of adjusting prices and availability according to expected demand in order to maximise the restaurant's total revenue.
Demand forecasting is the prediction of the sales, covers or usage a restaurant will have in a future period. It helps you buy better, plan staff and prepare production with less waste and fewer stockouts.
Reservation cancellation rate measures what percentage of confirmed bookings are cancelled before service. It helps you understand how reliable demand is and adjust forecasts, rotas, purchasing and booking policy.
RevPAR measures revenue per available room in a hotel or other accommodation. It combines occupancy and average rate to show whether capacity is being monetised well, not just whether a lot of rooms are being sold.
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