ADR: average daily rate for hotels, and how to calculate it

ADR, the average daily rate, is the average room revenue a hotel earns for each room it sells1. You calculate it by dividing room revenue by the number of rooms sold for the same night or period. It is the price half of your performance, and it only makes sense next to occupancy, the volume half.

By hotels.tools · Last checked 6 November 2026

What ADR is, and what it is not

ADR answers one question: when we sold a room, what did it earn on average? It is an average of many different rates, not a price you set8. On one night you may sell some rooms at your public rate, some through a corporate agreement, some in a package and a few at a late discount. ADR blends all of them into one figure.

"Daily" refers to the room night. A guest who stays three nights at different nightly prices adds three room nights and three amounts to the calculation. ADR is not the average booking value, and it is not your best available rate.

Because it is an average, ADR can move without any change to your prices. If more of your rooms sell through a discounted segment this month, ADR falls even though every rate on your rate sheet stayed the same. When ADR moves, the first question is always whether prices changed or the mix changed.

Same rates, lower ADRIllustrative chart. The rate sheet is the same in both months: BAR $160, Corporate $130, Package, room part $140, Group $110. Month 1 sells 380, 110, 70, 40 room nights in those segments and has an ADR of $148.83. Month 2 sells 260, 110, 70, 160, moving BAR nights to a group, and its ADR falls to $138.83 with no price changed.Month 1ADR $148.83 from 600 room nights38011070Month 2ADR $138.83 from 600 room nights26011070160BAR $160Corporate $130Package, room part $140Group $110
Same rates, lower ADR. Illustrative, with made-up rates and room nights. The rate sheet and the rooms sold are the same in both months; only the mix changes.

How to calculate ADR so it compares fairly

The formula is short: ADR = room revenue ÷ rooms sold. The hard part is agreeing what belongs in each number. Benchmark providers publish rules for this, and following them lets you compare your ADR with your market.

A company that runs a large hotel benchmark defines rooms revenue as revenue from renting guest rooms, net of any rebates and discounts2. Its reporting guidelines add that room revenue is also net of refunds, allowances, overcharges and taxes3.

Packages are split. If a package includes a room, food and a spa treatment, the revenue is allocated to each department, and only the room part counts as rooms revenue2. Resort, destination and urban fees are always reported as miscellaneous income, not rooms revenue2.

On the rooms side, complimentary rooms are left out of rooms sold3. No-shows are not counted as rooms sold either3. That keeps a free room from dragging ADR down, although it still counts as an available room when you calculate occupancy and RevPAR.

What goes into ADR under those benchmark reporting rules, and where the rest goes.
ItemIn ADR?Where it goes
Revenue from renting guest roomsYesRoom revenue, net of rebates and discounts2
Taxes, refunds, allowances and overchargesNoTaken out of room revenue3
Room part of a packageYesRoom revenue2
Food, spa and other parts of a packageNoThe department that provides them2
Resort, destination and urban feesNoMiscellaneous income2
Complimentary rooms and no-showsNoLeft out of rooms sold3

ADR in published market data

For August 2026, the benchmark company reported a US ADR of US$161.78, up 1.5% on a year earlier4. In July 2026 it was US$171.74, up 5.7%5. For the full year 2025, US ADR was US$160.54, up 0.9% on 20246.

City figures show how far one market can sit from the national number. In the same August release, ADR in San Francisco rose 8.7% to US$216.77, while New York City fell 3.3% to US$275.074. A national average is a reference point, never a target for a single hotel.

What is a good ADR?

A good ADR is not a number you can look up. It depends on your location, class, season and room types. A national figure is one average for a whole country, so treat it only as a reference point: the benchmark company put full-year 2025 US ADR at US$160.546.

Two tests say more. The first is your competitive set: benchmark reports turn your ADR into an index against similar hotels nearby, and above 100 means your rate is higher than theirs8. The second is your own occupancy. A rate above your neighbours is only good if you still sell enough rooms, which is why ADR is judged together with RevPAR. The RevPAR calculator shows what a rate change does to it.

ADR vs ARR, the average room rate

ARR stands for average room rate. A hotel software company gives its formula as total room revenue divided by the number of rooms sold, and says ARR and ADR use the same core formula14. It adds that some hotels use ADR for daily reporting and ARR for longer periods, and that reporting conventions vary14.

So before you compare someone’s ARR with your ADR, ask which period it covers and whether taxes, package parts and complimentary rooms were treated the way the table above treats them. If both answers match, you are looking at the same measure under two names.

Best available rate and rate fences

Your best available rate, or BAR, is the rate you quote for a given night. Under BAR pricing, a hotel quotes the lowest available rate for each night of a stay, so guests pay different prices for different nights in the same room rather than one blended rate7. A Cornell survey of 153 travellers found that they rated individual nightly rates as significantly more fair, acceptable, reasonable and honest than blended rates, although frequent travellers saw no difference in fairness between the two7.

Lower rates usually come with conditions, called rate fences. Fences are rules and restrictions that let guests sort themselves by price, so a hotel earns more from the demand it already has7. Common types relate to the transaction, the stay itself and the customer8. In practice that means things like paying in advance, booking a minimum number of nights or belonging to a group that qualifies.

Fences leak. Some guests who would happily pay the higher rate will take the lower one if they can8. A fence works only if the guests you want at full price either cannot meet it or do not want to. A discount anyone can take is not a fenced offer, it is a price cut.

Every open discount pulls ADR towards it. That is not a problem in itself, as long as the extra rooms it sells earn more than the rate you gave up. The worked example below shows how much extra occupancy a typical rule-based discount needs before RevPAR stays level.

Reading ADR against your competitive set

Benchmark reports turn your ADR into an index by dividing it by the average of a group of similar hotels nearby8. Above 100 means your rate is higher than theirs, below 100 lower8. Cornell researchers advise hotels to be careful that their ADR index does not fall below that of the competitive set8.

Without a benchmark subscription, you can watch the public prices of four or five hotels your guests also consider. Public prices are generally safe to watch. The European Commission says information that has been put in the public domain for legitimate reasons, and so is readily accessible to all competitors and customers, is usually not commercially sensitive9.

Direct contact is different. In the same guidelines, the Commission says that exchanging information about future prices is particularly likely to lead to a collusive outcome9. It also warns that feeding competitors’ sensitive data into one shared pricing tool could amount to collusion, even though using public data in pricing software is legal9. So use what any guest can see, and do not swap rates or plans with the hotel next door.

Fees, taxes and the price a guest sees

The price you advertise and the ADR you report are not the same number, and the rules for each differ. ADR leaves out taxes and resort fees, as the reporting rules above show. Advertising rules point the other way: they want mandatory fees in the headline price.

In the United States, the FTC Rule on Unfair or Deceptive Fees took effect on 12 May 202510. It covers short-term lodging, including hotels, motels, inns and vacation rentals11. The FTC gives the example of a resort that charges US$199 a night plus a mandatory US$39 daily resort fee, and says the resort fee must be included in the total price10. Only government charges, shipping and optional extras may be left out of the total, and the total must be shown more prominently than other price information10.

In Germany, the price indication rules require a business that offers goods or services to consumers, or advertises them to consumers with prices, to state the total price12. The total price includes VAT and all other price components13. If a price is broken down, the total must be emphasised12. At EU level, the European Commission announced in December 2020 that, after action by EU consumer authorities, two large online travel companies had changed how they present offers and were displaying the total price including mandatory fees and charges more accurately15.

The practical result is two views of the same booking. Show guests the all-in price your market’s rules require. Then, for ADR, strip out tax and fees again so your figures stay comparable with your past and your market.

How to increase ADR without losing guests

Start with the mix before the price. If ADR is low because too many rooms go to your cheapest segment, the fix may be fewer discounted rooms on high-demand nights, not a higher public rate.

Fence your discounts. A non-refundable rate, a minimum stay or a package keeps full-price guests at full price better than a plain reduction does. Check after each change whether the guests you wanted to keep at BAR are still paying it.

Price by night, not by week. Busy nights can carry a higher rate while quiet nights stay competitive, which is what BAR pricing does. The Pricing Assistant applies simple occupancy and lead-time rules to a BAR so you can see this in practice.

Sell the stay, not only the room. An upgrade to a better room type raises room revenue directly. Breakfast, parking or spa add-ons earn money too, but under the benchmark rules the non-room parts of a package belong to other departments2, so they raise total revenue rather than ADR. Length-of-stay rules work like fences: a minimum stay protects a peak night’s rate but can leave the nights around it empty, so set them date by date.

Finally, judge every rate change by RevPAR and profit, not by ADR alone. A higher ADR that empties the hotel is not a win, and the RevPAR guide explains how to read the two together.

Worked example: what a discount has to sell to stand still

Illustrative inputs: a 40-room hotel, BAR $120, a date 5 days out with 25% of rooms sold.

  1. The Pricing Assistant's rules see low occupancy close to arrival and apply a multiplier of 0.85, so it suggests $102.00 instead of $120.00.
  2. Say you expected to finish the night at 60% occupancy at full BAR. RevPAR would be $120 times 60%, which is $72.00.
  3. To keep RevPAR at $72.00 at the lower rate, occupancy has to reach $72.00 divided by $102.00, which is 70.6%.
  4. In a 40-room hotel that means about 4.2 extra rooms sold that night, only to earn what the full rate would have earned.
  5. If the lower rate lifts occupancy to 65% instead, RevPAR falls to $66.30.

A lower ADR only pays when it brings in enough extra rooms. Work out the occupancy you need before you publish the cut, not after.

Open the Pricing Assistant

Frequently asked questions

What is the difference between ADR and BAR?

BAR is a price you set: the rate you quote for a night. ADR is a result: the average room revenue you actually earned per room sold, across every rate and segment that night8. ADR is usually below BAR because some rooms sell at discounts or contracted rates.

Do complimentary rooms lower ADR?

Not if you follow the benchmark rules. Complimentary rooms are left out of rooms sold3, so they do not dilute ADR. They still count as available rooms, so they lower occupancy and RevPAR instead.

Should breakfast be included in ADR?

Only the room part of a package belongs in rooms revenue. The benchmark rules allocate package revenue to each department, so breakfast goes to food and beverage2. Decide on a fair value for each component and use it every time.

Does a resort fee count towards ADR?

No. Resort, destination and urban fees are reported as miscellaneous income, not rooms revenue2. In the United States the same fee must still appear in the advertised total price under the FTC fee rule10.

Can I use competitors’ rates to set mine?

Using prices any guest can see is generally fine; the European Commission treats genuinely public information as usually not commercially sensitive9. Exchanging current or future prices directly with competitors is a different matter: the Commission lists the exchange of current pricing and future pricing intentions among exchanges that have been treated as restrictions of competition by object9. This is general information, not legal advice.

Why did my ADR fall when I did not change my prices?

Because ADR is an average of many rates8. If a larger share of rooms sold through cheaper segments, such as groups, contracts or packages, ADR drops even with an unchanged rate sheet. Look at room nights by segment before you change any price.

Sources

  1. What Is RevPAR? Revenue per Available Room Explained, Abigail Ward (EHL Insights, September 2026), checked 6 November 2026
  2. P&L Data Reporting Guidelines (CoStar, STR Benchmark), checked 6 November 2026
  3. Historical Benchmarking Data Reporting Guidelines (CoStar, STR Benchmark), checked 6 November 2026
  4. U.S. hotel performance for August 2026 (CoStar release, September 2026), checked 6 November 2026
  5. U.S. hotel performance for July 2026 (CoStar release, August 2026), checked 6 November 2026
  6. U.S. hotels report first full-year occupancy, RevPAR declines since 2020 (CoStar release, January 2026), checked 6 November 2026
  7. Best-available-rate Pricing at Hotels: A Study of Customer Perceptions and Reactions, Rohlfs and Kimes (Cornell CHR Reports, 2005, PDF), checked 6 November 2026
  8. Revenue Management for Enhanced Profitability: An Introduction for Hotel Owners and Asset Managers, Anderson and Kimes (Cornell eCommons, PDF), checked 6 November 2026
  9. Guidelines on the applicability of Article 101 TFEU to horizontal co-operation agreements (European Commission, 2023, PDF), checked 6 November 2026
  10. The Rule on Unfair or Deceptive Fees: Frequently Asked Questions (US Federal Trade Commission, May 2025), checked 6 November 2026
  11. 16 CFR 464.1, Definitions, Rule on Unfair or Deceptive Fees (Cornell Legal Information Institute), checked 6 November 2026
  12. § 3 PAngV: Pflicht zur Angabe des Gesamtpreises (gesetze-im-internet.de), checked 6 November 2026
  13. § 2 PAngV: Begriffsbestimmungen (gesetze-im-internet.de), checked 6 November 2026
  14. Average Room Rate: Formula, Example and Tips, Eva Lacalle (Mews blog, August 2026), checked 7 November 2026
  15. Following EU action, Booking.com and Expedia align practices with EU consumer law (European Commission press release, December 2020, PDF), checked 6 November 2026

Calculators for this guide

General information only, not tax, legal or financial advice. Rates and rules change, so check them with the relevant authority, your employer or a qualified adviser before relying on them. Company names identify the companies described; hotels.tools is not affiliated with them.