Financial
What is ADR (Average Daily Rate)?
The average revenue earned per occupied accommodation unit per day, calculated by dividing total room revenue by the number of rooms sold.
Understanding ADR (Average Daily Rate)
ADR, or Average Daily Rate, is a key performance metric in the hospitality industry, including outdoor hospitality properties like glamping resorts, RV parks, and campgrounds. It represents the average revenue generated per occupied unit per day.
ADR is calculated by dividing total room revenue by the number of rooms sold (not available). For example, if a glamping resort generated $10,000 in revenue from 20 occupied units, the ADR would be $500.
ADR is crucial for revenue management and pricing strategy. It helps property owners understand their pricing effectiveness, compare performance to competitors, and optimize revenue. ADR can vary significantly based on seasonality, location, amenities, and market conditions.
In outdoor hospitality, ADR is often higher for glamping accommodations compared to traditional campgrounds due to the luxury positioning and amenities. Understanding ADR benchmarks for your market and property type is essential for financial planning and feasibility analysis.
Sage Outdoor Advisory includes ADR analysis and benchmarking in our feasibility studies, helping clients understand market rates and optimize pricing strategies.
ADR is calculated by dividing total room revenue by the number of rooms sold (not available). For example, if a glamping resort generated $10,000 in revenue from 20 occupied units, the ADR would be $500.
ADR is crucial for revenue management and pricing strategy. It helps property owners understand their pricing effectiveness, compare performance to competitors, and optimize revenue. ADR can vary significantly based on seasonality, location, amenities, and market conditions.
In outdoor hospitality, ADR is often higher for glamping accommodations compared to traditional campgrounds due to the luxury positioning and amenities. Understanding ADR benchmarks for your market and property type is essential for financial planning and feasibility analysis.
Sage Outdoor Advisory includes ADR analysis and benchmarking in our feasibility studies, helping clients understand market rates and optimize pricing strategies.
Examples of ADR (Average Daily Rate)
- •A 20-unit glamping resort generates $180K in monthly revenue from 600 occupied unit-nights (20 units × 30 days). ADR = $180K ÷ 600 = $300 per night. During peak season, rates increase to $400/night, while offseason rates drop to $200/night, creating seasonal ADR variations. This $300 ADR helps property managers track pricing effectiveness and compare to competitors averaging $280 ADR in the same market.
- •An RV park with 80 full hookup sites charges $75/night. In a month with 1,680 occupied site-nights (70% occupancy), total revenue is $126K. ADR = $126K ÷ 1,680 = $75. The park also offers premium waterfront sites at $95/night and basic sites at $55/night. The blended ADR of $75 reflects the mix of site types, helping owners understand their average rate across different offerings and seasons.
- •A family campground with 50 tent sites charges $45/night. During a summer month with 1,125 occupied site-nights (75% occupancy), revenue totals $50,625. ADR = $50,625 ÷ 1,125 = $45. This ADR is competitive with nearby campgrounds averaging $42-48, demonstrating proper market positioning. By tracking ADR monthly, the owner can identify pricing opportunities and seasonal trends.
Common Use Cases
- •Pricing strategy development
- •Revenue forecasting
- •Competitive analysis
- •Financial modeling
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Frequently Asked Questions About ADR (Average Daily Rate)
How is ADR calculated?
ADR = Total Room Revenue ÷ Number of Rooms Sold. It represents the average revenue per occupied unit per day.
What's a good ADR for glamping?
ADR varies by location and amenities. Our market reports provide ADR benchmarks by region and property type.
How does ADR relate to profitability?
ADR, combined with occupancy rate, determines RevPAR (Revenue Per Available Room), which directly impacts profitability.
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