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 (dollars)
• \( \text{Total Room Revenue} \) — Total revenue from room sales (dollars)
• \( \text{Rooms Sold} \) — Total number of rooms sold (count)

Explanation: ADR provides insight into the average price at which hotel rooms are being sold, excluding other revenue sources like food and beverage.

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 per available room.

4. Using the Calculator

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

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 with local competitors for context.

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 I include taxes and fees 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, and monthly to track performance trends and adjust pricing strategies accordingly.

Q5: Can ADR be used for forecasting?
A: Yes, historical ADR data combined with market trends helps in forecasting future revenue and setting optimal room rates.