All terms

ADR (average daily rate)

ADR, the average daily rate, is the average room revenue a hotel earns for each room it sold: room revenue divided by rooms sold.

How to calculate ADR

ADR = room revenue ÷ rooms sold, for the same period. Room revenue leaves out food, drinks, the spa and taxes, and complimentary and house-use rooms are left out of the rooms sold. An illustrative night: 80 rooms sold for €16,000 of room revenue gives an ADR of €200.

When a rate includes breakfast, the breakfast share belongs in food and beverage, not in room revenue. Leave it in and ADR is overstated.

What it does not tell you

ADR says nothing about the rooms that stayed empty. A hotel can raise it by holding its price and selling fewer rooms, which is why it is read beside occupancy, and why RevPAR exists.

Track it by segment as well (direct, OTA, groups, corporate), because one average across all of them hides which segment actually moved.

Sources

RevPAR (revenue per available room)

RevPAR, revenue per available room, is the room revenue a hotel earns for every room it had available, sold or not: room revenue divided by rooms available, which equals ADR multiplied by occupancy.

TRevPAR (total revenue per available room)

TRevPAR, total revenue per available room, is all of a hotel’s revenue (rooms, food and drink, spa, events, parking and other spend) divided by the number of rooms available.

Rate parity

Rate parity is offering the same room, for the same dates and conditions, at the same price on every channel: the hotel’s own website, each online travel agency and the phone.

Watch it answer a real enquiry from your property.

Thirty minutes on a call, with your own channels and rates on the screen, and no contract at the end of it.

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