1. What is Average Daily Rate (ADR)?

Average Daily Rate (ADR) is a key performance metric in the hotel industry that measures the average revenue earned per occupied room per day. It provides insight into the pricing strategy and revenue management effectiveness of a hotel property.

2. How Does the Calculator Work?

The calculator uses the ADR formula:

Where:

• \( ADR \) — Average Daily Rate (dollars)
• \( \text{Total Revenue} \) — Total room revenue for the period (dollars)
• \( \text{Rooms Sold} \) — Total number of rooms sold during the period (count)

Explanation: This calculation provides the average price at which each room was sold during a specific time period, excluding complimentary rooms and rooms not sold.

3. Importance of ADR Calculation

Details: ADR is crucial for hotel revenue management as it helps in evaluating pricing strategies, comparing performance against competitors, forecasting revenue, and making informed decisions about rate adjustments and promotions.

4. Using the Calculator

Tips: Enter total revenue in dollars and rooms sold as a count. Ensure revenue includes only room revenue (excluding food, beverage, or other services) and rooms sold represents actual paid occupancies.

5. Frequently Asked Questions (FAQ)

Q1: What is a good ADR for hotels?
A: A good ADR varies by location, hotel type, and season. Luxury hotels typically have higher ADRs than budget hotels. Compare against local competitors and historical performance.

Q2: How does ADR differ from RevPAR?
A: ADR measures average room rate, while RevPAR (Revenue Per Available Room) considers both rate and occupancy, calculated as ADR × Occupancy Rate.

Q3: Should complimentary rooms be included in rooms sold?
A: No, complimentary rooms and staff rooms should not be included in the rooms sold count for ADR calculation as they generate no revenue.

Q4: How often should ADR be calculated?
A: ADR should be calculated daily, weekly, monthly, and annually to track performance trends and make timely pricing decisions.

Q5: What factors can affect ADR?
A: Seasonality, day of week, local events, competition, booking channels, length of stay, and room type mix all significantly impact ADR.