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 helps hotels evaluate their pricing strategy and revenue management effectiveness.

2. How Does the Calculator Work?

The calculator uses the ADR formula:

Where:

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

Explanation: This formula calculates the average price at which hotel rooms are sold, providing insight into pricing effectiveness and revenue performance.

3. Importance of ADR Calculation

Details: ADR is crucial for hotel revenue management, helping to optimize pricing strategies, measure performance against competitors, and maximize profitability. It's one of the three key metrics in the hospitality industry, along with occupancy rate and RevPAR.

4. Using the Calculator

Tips: Enter total revenue in dollars and number of rooms sold as a whole number. Both values must be positive (revenue > 0, rooms sold ≥ 1).

5. Frequently Asked Questions (FAQ)

Q1: What is a good ADR for hotels?
A: A good ADR varies by hotel type, location, 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: RevPAR = ADR × Occupancy Rate.

Q3: Should taxes and fees be included in ADR calculation?
A: Industry standard is to calculate ADR using room revenue before taxes and fees for consistent comparison across different tax jurisdictions.

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

Q5: What factors can affect ADR?
A: Seasonality, day of week, local events, competition, hotel amenities, booking channel, and length of stay can all impact ADR.