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What is ADR (Average Daily Rate)?

Updated 2026-05-27

Average Daily Rate (ADR) is a key performance indicator in the vacation rental industry that represents the average revenue earned for an occupied property on a per-night basis. It is calculated by dividing the total accommodation revenue by the total number of nights sold during a specific period.

This metric excludes complimentary stays, unbooked nights, and revenue from ancillary services like cleaning fees or tours. ADR is a fundamental measure used by property managers to assess the effectiveness of their pricing strategies and to compare performance against historical data or market competitors.

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How it works

To calculate ADR, a property manager takes the total revenue generated from bookings and divides it by the number of nights booked (or "room nights sold"). For example, if a beachfront condo generates $6,000 in accommodation revenue from 20 booked nights in July, the ADR for that month is $300 ($6,000 / 20).

This calculation isolates the average price of a booked night, providing a clear view of pricing performance independent of occupancy.

Why it matters

ADR is a critical metric for revenue management because it directly reflects the pricing power of a property. A higher ADR generally indicates stronger pricing, leading to increased profitability.

Property managers track ADR to evaluate the success of pricing adjustments, promotional offers, and seasonal rate strategies. Monitoring this metric helps in making informed decisions to maximize revenue from each booking without sacrificing occupancy.

Examples

  • A host rents their cabin for a 3-night weekend. Friday is $250, Saturday is $350, and Sunday is $200. The total revenue is $800. The ADR for this stay is $800 / 3 nights = $266.67.
  • A property manager oversees 10 apartments. In April, they collectively generate $45,000 in accommodation revenue from a total of 150 booked nights across all units. The portfolio's ADR for April is $45,000 / 150 = $300.
  • A boutique hotel compares its ADR from last July ($450) to this July ($495). This 10% year-over-year increase indicates a successful pricing strategy or improved market conditions.
  • During a city-wide music festival, a host increases their rates. They book 4 nights at $500/night, generating $2,000 in revenue. Their ADR for that period is $500, significantly higher than their typical ADR of $180.

Frequently asked questions

How is ADR different from RevPAR?+
ADR measures the average rate for *occupied* nights only, while RevPAR (Revenue Per Available Room) measures revenue across *all available* nights, including vacant ones. ADR reflects your pricing for successful bookings, whereas RevPAR provides a more holistic view by factoring in occupancy. A property can have a high ADR but a low RevPAR if its occupancy is poor.
Does ADR include cleaning fees and taxes?+
Standard ADR calculations focus exclusively on the nightly accommodation revenue. They typically exclude additional charges that are often itemized separately, such as cleaning fees, taxes, resort fees, or booking platform service fees. This ensures the metric accurately reflects the core nightly price of the rental itself. However, for internal analysis, some managers may use a modified ADR that includes certain fees.
What is a good ADR for a vacation rental?+
A 'good' ADR is highly relative and depends on factors like your property's location, size, amenities, seasonality, and the competitive landscape. Instead of a single target number, it is more effective to benchmark your ADR against similar properties in your market (your 'comp set') and your own historical performance. The goal is to consistently achieve an ADR that is competitive yet maximizes your revenue.
How can I increase my property's ADR?+
To increase ADR, focus on strategies that justify a higher nightly rate. This includes using dynamic pricing to adjust rates based on demand, enhancing your property with sought-after amenities like a hot tub or high-speed Wi-Fi, and improving your listing with professional photos and compelling descriptions. Offering packages or targeting longer stays during off-peak seasons can also boost average daily revenue.
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