ADR (Average Daily Rate) is rooms revenue divided by the number of room nights sold in a period: rooms revenue ÷ room nights sold. Complimentary and house-use rooms are normally left out of both sides, otherwise they drag the figure down.
Example: $8,400 of rooms revenue on 70 room nights sold gives an ADR of $120. ADR tells you what you are selling at, not how much you are selling, so it only makes sense next to occupancy. A rising ADR on falling occupancy can simply mean you priced yourself out of part of the market.
In practice: track ADR by segment (transient, group, corporate, OTA) and against the same period last year. A blended ADR hides the mix: one large discounted group can make a healthy month look like a pricing problem.
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