Revenue Management
ADR — Average Daily Rate
The average realised price of the rooms a hotel actually sold (also called Average Room Rate, ARR).
Academic definition
Average Daily Rate (ADR), also termed Average Room Rate (ARR), measures the average rate paid per occupied room over a period. It is calculated by dividing total room revenue by the number of rooms sold, excluding complimentary and house-use rooms. ADR isolates pricing performance from volume: it reflects what guests paid on average, independent of how full the hotel was. It is a foundational input to RevPAR (RevPAR = ADR × occupancy) and to the Average Rate Index used in competitive benchmarking. Because it considers only sold rooms, ADR can rise even as a hotel empties — a property that refuses lower-rated business will show a higher ADR over fewer nights. For this reason ADR is read alongside occupancy rather than in isolation. Note the acronym collision: in hospitality, ARR means Average Room Rate; in software, ARR means Annual Recurring Revenue.
Room Revenue = total rooms revenue · Rooms Sold = occupied rooms, excluding complimentary and house-use rooms
Worked example
A hotel sells 1,125 room-nights for ₹45,00,000. ADR = ₹45,00,000 ÷ 1,125 = ₹4,000. Push ADR to ₹5,000 by refusing low rates and selling only 600 nights, and the hotel collapses on a "stronger" rate.
The ProfitPAR™ lens
ADR is the brochure price — the rate before the world gets to it. It says nothing about what it cost to win the booking. An ADR of ₹4,000 sold through an OTA at 18% commission with a promotion attached is not ₹4,000 to the owner; it is closer to ₹3,000 once the channel takes its cut. The gap between ADR and Net ADR is the single clearest signal of channel and discounting health — and it is invisible on the dashboard. ProfitPAR™ begins where ADR ends: with the rate that actually survives the booking.
A high ADR you paid 18% to win is a lower ADR wearing a disguise.
Measure what each room actually keeps.
ProfitPAR is offered as a private revenue practice, by invitation. Tell us about your hotel to begin.
Request an InvitationWorked examples use illustrative figures in Indian Rupee (₹) with lakh/crore conventions. They are composite and representative, not drawn from any single property. ProfitPAR™ is a trademark of Sibasish Misra.