ADR indicates the average revenue achieved on sold nights, which can help compare pricing performance across periods.
Hospitality glossary · Revenue metrics
Average Daily Rate (ADR)
Definition
Average Daily Rate (ADR) is a hospitality revenue metric that measures the average accommodation revenue earned for each occupied room or unit night during a period.
In plain English
What does ADR mean?
ADR answers: on the nights you actually sold, what was the average accommodation revenue per occupied night?
FormulaADR = accommodation revenue ÷ occupied room or unit nights
Reporting conventions can differ. Operators should use a consistent definition of accommodation or room revenue and avoid mixing unrelated fees into one period and excluding them in another.
Worked example
If a property generates $4,200 in accommodation revenue across 20 occupied nights, ADR = $4,200 ÷ 20 = $210.
Operational meaning
Why it matters in hospitality operations.
ADR helps operators understand achieved pricing, but it does not show how much inventory remained unsold. That is why ADR is often interpreted alongside occupancy and RevPAR.
See operational finance in HOS →How to interpret it
Keep the metric or concept attached to its operating context.
Definitions are useful when the underlying data and workflow boundaries stay consistent.
A high ADR can coexist with low occupancy. ADR alone cannot tell you how efficiently total available inventory was used.
Comparisons are only useful when the revenue and occupied-night definitions are consistent.
Portfolio ADR can shift because the mix of properties sold changed, even when individual property rates did not.
Common mistakes
What not to assume.
01
Dividing by available nights instead of occupied nights.
02
Comparing ADR across periods with inconsistent revenue definitions.
03
Treating ADR as a complete profitability measure.