Finance
ADR (Average Daily Rate): what it is
ADR (Average Daily Rate) is the average price per night actually achieved by an accommodation in a period, calculated by dividing total revenue by sold nights. It's a fundamental revenue management metric and indicates how effectively a property manager monetizes each sold night.
- Primary keyword
- ADR short-term rentals
- Monthly search volume
- ~210
Full definition
The formula is ADR = total revenue / sold nights. Simple but data requires attention: 'total revenue' can include or exclude cleaning fees and tourist taxes (depending on accounting convention). The most common benchmark excludes both, counting only pure nightly price. ADR differs from average price shown in listings: listings publish 'list' price while ADR reflects actually paid price after discounts, promos, last-minute. For this, ADR is generally 5-15% below average list price.
How it works
ADR calculates automatically in any modern management software. For monthly analysis: January ADR = January revenue / January sold nights. ADR trend is one of the most important indicators: rising ADR signals market improvement or positioning improvement; falling ADR with stable occupancy suggests more aggressive competition or demand drop. Comparison with market ADR (AirDNA, KeyData) indicates whether the property manager is above or below zone median.
Practical example
A Florence apartment in 2025 generated €18,500 revenue on 178 sold nights. ADR = 18,500/178 = €103.93/night. Average list price was €115/night; the 9.5% delta reflects weekly discounts, last-minute promos, and rebooked cancellations at reduced price. Comparison with Florence center 2025 benchmark (~€140/night median ADR) suggests below-average positioning — opportunity for more aggressive pricing.
📊 Key data point
For apartments in Italian tourist centers, 2026 median ADR ranges between €85 (provincial cities) and €180 (Rome, Milan, Venice, Florence historical centers). The range reflects tourist density and asset quality.
Frequently asked question
What's better: high ADR with low occupancy or medium ADR with high occupancy?
Correct answer: depends on your opportunity cost of an empty night. If you have high fixed costs (mortgage, building, always-on utilities), high occupancy protects from loss; go for medium ADR + high occupancy. If you have premium structure with low marginal costs, high ADR + medium occupancy maximizes profit. The summary KPI to decide is RevPAR (ADR × occupancy): pick the combination maximizing RevPAR, not individual values.
Related terms
Explore the network of concepts that orbit around this term.