[ HOSPITALITY GLOSSARY · METRIC ]
What Is ADR in Hotels? (Average Daily Rate)
ADR, or Average Daily Rate, is the average revenue a hotel earns per occupied room per night. It's calculated by dividing total room revenue by the number of rooms sold.
ADR tells you how much guests are actually paying for a room, independent of how full the hotel is — one of the three core numbers in hotel revenue management.
How to calculate ADR
ADR = Room revenue ÷ Rooms sold
(OVER THE SAME TIME PERIOD)
Example: a hotel earns $12,000 in room revenue on a night it sells 80 rooms.
ADR = $12,000 ÷ 80 = $150
Note that ADR only counts occupied rooms — empty rooms don't drag it down. That's the key difference from RevPAR (below), which does account for empty rooms.
Why ADR matters
It isolates pricing power. ADR shows what guests will pay for your rooms, separate from occupancy. A rising ADR means you're commanding higher rates; a falling one may signal over-discounting.
It's a lever, not just a number. Revenue managers push ADR up through dynamic pricing, packaging, and segmentation — without simply chasing occupancy at any price.
It feeds RevPAR. ADR and occupancy multiply together into RevPAR, the industry's headline performance metric.
ADR vs RevPAR vs TRevPAR
| Metric | What it counts | Formula |
|---|---|---|
| ADR | Revenue per occupied room | Room revenue ÷ rooms sold |
| RevPAR | Revenue per available room (rate × occupancy) | Room revenue ÷ rooms available |
| TRevPAR | Total revenue per available room | Total revenue ÷ rooms available |
ADR answers “how much are we charging?” RevPAR answers “how well are we filling and pricing?” TRevPAR answers “how much is every guest worth in total?” — see What Is TRevPAR?.
How to increase ADR
Dynamic pricing — raise rates when demand is strong instead of holding a static price.
Package instead of discount — a room-plus-experience bundle protects rate while raising perceived value, so ADR holds even when you're filling soft demand.
Upsell room categories — move guests to higher-value rooms at booking or check-in.
Reduce OTA reliance — commission-free direct bookings mean more of the rate stays with the hotel.
The most durable ADR strategy is to stop competing on the room alone. When a hotel sells upsells and experiences and packages, it protects and grows rate without a race to the bottom.
Frequently asked questions
- What does ADR mean in a hotel?
- ADR stands for Average Daily Rate — the average revenue a hotel earns per occupied room per night, calculated as room revenue divided by rooms sold. It measures pricing power independent of occupancy.
- How do you calculate ADR?
- Divide total room revenue by the number of rooms sold. For example, $12,000 in room revenue across 80 rooms sold gives an ADR of $150. Only occupied rooms are counted.
- What is the difference between ADR and RevPAR?
- ADR is revenue per occupied room (room revenue ÷ rooms sold), so empty rooms don't affect it. RevPAR is revenue per available room (room revenue ÷ rooms available), so it reflects both rate and occupancy.
[ RELATED ]
[ GROW RATE WITHOUT THE RACE TO THE BOTTOM ]
Protect ADR by selling more than the room.
DestinationCommerce turns your hotel into a branded marketplace — experiences, packages, and local partners — so you grow revenue per guest without discounting the rate.