Average Daily Rate (commonly referred to as ADR) is a statistical unit that is often used in the lodging industry. The number represents the

average In ordinary language, an average is a single number taken as representative of a list of numbers, usually the sum of the numbers divided by how many numbers are in the list (the arithmetic mean). For example, the average of the numbers 2, 3, 4, 7 ...

rental income per paid occupied room in a given time period. ADR along with the property's

occupancy Within the context of building construction and building codes, "occupancy" refers to the use, or intended use, of a building, or portion of a building, for the shelter or support of persons, animals or property. A closely related meaning is t ...

are the foundations for the property's financial performance. ADR is one of the commonly used financial indicators in

hotel industry A hotel is an establishment that provides paid lodging on a short-term basis. Facilities provided inside a hotel room may range from a modest-quality mattress in a small room to large suites with bigger, higher-quality beds, a dresser, a ref ...

used to measure how well a

hotel A hotel is an establishment that provides paid lodging on a short-term basis. Facilities provided inside a hotel room may range from a modest-quality mattress in a small room to large suites with bigger, higher-quality beds, a dresser, a re ...

performs compared to its competitors and itself (year over year). It is common in the hotel industry for the ADR to gradually increase year over year bringing in more

revenue In accounting, revenue is the total amount of income generated by the sale of goods and services related to the primary operations of the business. Commercial revenue may also be referred to as sales or as turnover. Some companies receive reven ...

. However, ADR itself is not enough to measure the performance of the hotel. One should combine ADR, occupancy and

RevPAR RevPAR, or revenue per available room, is a performance metric in the hotel industry that is calculated by dividing a hotel's total guestroom revenue by the room count and the number of days in the period being measured.Mauri, A. G. (2012), ''Hotel ...

(

per available room) to make a sound judgment on hotel performance.

Formula

ADR is calculated by dividing the rooms revenue earned by the number of rooms sold, with ''house use rooms'' and ''complimentary rooms'' excluded from the denominators. {{Reflist Business economics Business intelligence terms Hospitality management