Average daily rate (ADR)

Average daily rate is the average price a hotel actually collected for each room it sold on a given day or over a period. Unlike a published rack rate or list price, it reflects real transactions, including the effect of discounts, promotions, and different room types sold at different prices.

The formula is total room revenue / number of rooms sold, which deliberately excludes unsold rooms from the denominator, distinguishing it from revenue per available room, which divides the same revenue by all available rooms, sold or not, and so is always equal to or lower than ADR. ADR answers "what did we get paid for the rooms we sold," while RevPAR answers "how well did we monetize our total capacity."

Hotels track ADR to understand pricing power independent of how full the property is, and it is a primary lever in dynamic pricing and revenue management systems that raise or lower rates in response to demand signals like booking pace, local events, and competitor pricing. A common misreading is comparing ADR across properties or brands without adjusting for room mix, since a hotel with a higher share of suites will show a higher ADR than one dominated by standard rooms even at similar per-square-foot pricing.