Actual daily room revenue/total rooms sold.
The Average Daily Rate (ADR) is a key performance metric used in the hotel industry to measure the average revenue earned per occupied room in a given time period. It is calculated by dividing the total room revenue by the total number of occupied rooms over the same period.
The ADR helps hotel managers to assess the pricing strategy and adjust room rates based on demand, competition, and market trends. It also helps them to identify patterns in customer behavior and preferences.
To calculate the ADR accurately, it is essential to include all sources of room revenue, such as room rates, taxes, fees, and any additional services provided. Excluding any of these sources can result in an inaccurate ADR and lead to incorrect pricing decisions.
In summary, the ADR is a valuable tool for hotels to evaluate their revenue performance and make informed pricing decisions. Accurate calculation of ADR is critical to ensure that the hotel stays competitive in the market and maintains its financial health.