Welcome to the world of hotels, where every detail matters, from the décor in the lobby to the thread count on the sheets. If you're a hotel owner, manager, or just a curious traveler, understanding how to calculate Average Daily Rate (ADR) is crucial. ADR is a key performance metric that provides valuable insights into your hotel's profitability. In this article, we will guide you through the steps of calculating ADR and explain why it is an essential tool for any hotelier.
What is ADR?ADR stands for Average Daily Rate. It is a metric used in the hotel industry to determine the average price guests pay per room, per day. ADR is calculated by dividing the total revenue generated from room sales by the number of rooms sold.
Think of ADR as the heart of your hotel's financial health. It not only helps you understand how much revenue each room is generating but also provides insights into pricing strategies, market demand, and performance evaluation.
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