Glossary

ADR — Average Daily Rate

ADR is the average revenue earned per booked night. It tells you how much guests are paying on average for your property when it is occupied.

What ADR means

ADR stands for Average Daily Rate. In vacation rental revenue management, it measures the average nightly price achieved across all booked nights within a given period. It is one of the three core metrics — alongside occupancy rate and RevPAR — that property managers use to evaluate performance.

Unlike RevPAR, ADR only counts nights that were actually sold. It does not factor in empty nights, which means a high ADR does not automatically signal strong overall performance.

How to calculate ADR

ADR = Total revenue from booked nights ÷ Number of booked nights

For example, if a property earned €1,500 across 15 booked nights in a month, the ADR is €100. If in the same month 15 nights remained empty, the RevPAR would be €50 — revealing that the high rate came at the cost of occupancy.

ADR vs RevPAR

ADR and RevPAR are related but measure different things. ADR tells you the quality of your pricing on nights you did sell. RevPAR tells you how efficiently you monetized your full calendar.

A property with an ADR of €150 and 50% occupancy has a RevPAR of €75. A property with an ADR of €100 and 90% occupancy has a RevPAR of €90. Despite the lower nightly rate, the second property generates more revenue per available night — which is what ultimately matters.

Why ADR matters

ADR is the clearest indicator of your pricing power. It shows what the market is willing to pay for your property on the nights it books. Tracking ADR over time helps identify:

  • whether rates are increasing season over season
  • how your property compares to competitors on booked nights
  • the impact of promotions, discounts, or pricing rule changes
  • which months or day types command the highest rates

How to increase ADR

Raising ADR means charging more on high-demand nights without sacrificing enough occupancy to reduce RevPAR. The key levers are:

  • Demand-based pricing: raise rates during holidays, local events, and peak weekends
  • Minimum stay rules: blocking short stays during peak demand can lift ADR by filtering out lower-value bookings
  • Property quality: better photos, amenities, and reviews support higher rates because guests perceive more value
  • Competitor benchmarking: if similar properties nearby are priced higher, your ADR may have room to grow

Related terms

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Questions, answered

ADR (Average Daily Rate) is calculated by dividing total rental revenue by the number of nights booked. For example, €1,500 earned across 15 booked nights gives an ADR of €100. It only counts sold nights, not empty ones.
ADR measures the average price of nights that were sold. RevPAR measures revenue across all available nights, including unsold ones. A property can have a high ADR but low RevPAR if occupancy is poor — which is why both metrics are tracked together.
Price higher on high-demand dates — weekends, holidays, and events — without losing bookings. Dynamic pricing helps identify those moments automatically. Improving property quality and reviews also supports higher rates by justifying a premium price.
Neither in isolation. The goal is to optimize both together, which is what RevPAR measures. Chasing high occupancy with low prices sacrifices ADR. Holding rates too high leaves the calendar empty. Dynamic pricing finds the balance based on real market conditions.

Improve your ADR without sacrificing occupancy

Revz AI adjusts your rates daily based on demand signals, competitor pricing, and booking pace — helping you charge the right price on every night.

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