ADR (Average Daily Rate)

ADR measures the average revenue earned per occupied room and summarizes how effectively a
hotel converts demand into room revenue through pricing. It reflects pricing power, brand
positioning, and rate discipline.
Why it matters:
ADR helps distinguish whether revenue growth comes from higher prices or simply from higher
occupancy. It is a core indicator of pricing strategy quality.
Practical use:
Revenue teams monitor ADR daily and adjust rates based on demand patterns, competitor
pricing, and booking pace.
Real-life examples:
During a citywide event, a hotel may accept slightly lower occupancy but push ADR significantly
higher, resulting in greater total room revenue and profit than selling out at discounted rates.