Understanding the ADR Calculator
ADR (Average Daily Rate) is one of the core performance metrics in hotel and short-term-rental revenue management, alongside occupancy rate and RevPAR. It answers a simple question: on average, how much did each sold room night earn? The formula is ADR = total room revenue ÷ rooms sold. If a property took in $25,000 of room revenue from 200 sold room nights, its ADR is $125.
The formulas
- ADR = room revenue ÷ rooms sold — the average realized rate per sold room night.
- Occupancy rate = rooms sold ÷ rooms available × 100 — the share of sellable room nights actually sold.
- RevPAR (revenue per available room) = room revenue ÷ rooms available, which is identical to ADR × occupancy rate.
- Potential room revenue = ADR × rooms available — what the period would have earned had every available room sold at the current ADR.
Getting accurate inputs
- Use room-only revenue: exclude food and beverage, parking, spa, resort fees booked separately, and taxes. Mixing in other revenue inflates ADR.
- Count rooms sold as paid room nights only — complimentary and house-use rooms are excluded by industry convention.
- Rooms available is rooms × nights in the period, minus rooms out of order. A 50-room hotel over 30 nights has 1,500 available room nights before deductions.
- Keep revenue and room-night counts aligned to the same period — a month of revenue against a week of room nights will overstate ADR.
Interpreting the output
ADR and occupancy usually pull against each other: raising rates tends to lift ADR but can cost occupancy, while discounting fills rooms at a lower average rate. That is why RevPAR is the headline metric — it combines both, so a rate strategy only "wins" if RevPAR improves. Compare your numbers against the same period last year and against your competitive set rather than judging a single figure in isolation.