Average Daily Rate (ADR)

Average Daily Rate (ADR) is a noun and acronym that originated in the hotel industry as a standard financial metric, and has since been widely adopted by short-term rental platforms, property managers, and vacation rental hosts. Pronounced as three letters — “A-D-R” (ay-dee-ar) — it measures the average revenue a property earns for each night it is actually booked. The calculation is straightforward: divide total rental income by the number of nights sold during a given period. A lakefront cabin that earns $7,500 across 30 booked nights in July, for example, has an ADR of $250 for that month.

It’s worth noting what ADR does not measure: it only reflects performance on occupied nights, completely ignoring nights when the property sat empty. That distinction matters because a strong ADR can coexist with weak overall revenue if the property isn’t booking consistently. This is why hosts and property managers almost always track ADR alongside RevPAR (Revenue Per Available Room), which accounts for vacant nights and gives a fuller picture of earning potential.

In practice, ADR shows up in host dashboards, channel manager analytics, and revenue reports as a quick read on whether a pricing strategy is working. Hosts use it to compare performance across seasons, benchmark against similar properties, and set rate goals for the year ahead. You may also see it written as “avg. daily rate” in informal reports, or referred to as “average nightly rate” or “average booking rate” — and in hotel contexts, “average room rate” (ARR) covers the same concept.

Closely related terms worth understanding alongside ADR include RevPAR, occupancy rate, dynamic pricing, and revenue management. A high ADR paired with low occupancy is a signal to revisit availability settings or pricing thresholds, not just celebrate the nightly rate itself.