What Is Average Daily Rate (ADR)?
What is ADR? It's how much you earn per night when your property is booked. Formula: Total Room Revenue / Number of Rooms Sold. If your Airbnb earned $8,400 in March across 28 booked nights, your ADR is $300. But ADR doesn't tell the whole story—it ignores the nights you weren't booked. That's where RevPAR (Revenue Per Available Room) comes in: ADR x Occupancy Rate = RevPAR. A $300 ADR with 60% occupancy produces RevPAR of $180. A $200 ADR with 90% occupancy produces RevPAR of $180 too—same total revenue, different strategy. For short-term rental investors, ADR is one of three key metrics alongside occupancy and RevPAR. Tools like AirDNA and PriceLabs pull comparable ADR data by market and property type. Typical ADR ranges: $100–$150/night for budget markets, $200–$350 for mid-range vacation destinations, $400+ for luxury or peak-season resort areas.
Average Daily Rate (ADR) is the average revenue earned per occupied room or unit per night—calculated by dividing total room revenue by the number of nights sold—and serves as a core performance metric for short-term rentals, vacation properties, and hotels.
At a Glance
- What it is: Average revenue earned per occupied night
- Formula: Total Room Revenue / Number of Rooms Sold
- Related metric: RevPAR = ADR x Occupancy Rate (accounts for vacant nights)
- Data sources: AirDNA, PriceLabs, Mashvisor, AllTheRooms
- Typical ranges: $100–$150 (budget), $200–$350 (mid-range), $400+ (luxury/resort)
ADR = Total Room Revenue / Number of Rooms Sold
How It Works
ADR measures pricing effectiveness—how much you earn when the property is actually booked. It's one leg of the short-term rental performance triangle: ADR, occupancy, and RevPAR.
The calculation. Divide total room revenue by the number of nights sold (occupied nights). AirDNA includes cleaning fees in their ADR calculation—important for comparison purposes. If your property is booked for 5 nights at $250/night with a $200 cleaning fee, total revenue is $1,450 and ADR is $290 ($1,450 / 5). Some platforms exclude cleaning fees from ADR; others include them. Know which method your data source uses before comparing. Revenue from extras (experience add-ons, early check-in fees) is typically excluded from ADR.
ADR vs. RevPAR. ADR only considers nights the property was booked. RevPAR (Revenue Per Available Room) divides total revenue by all available nights—occupied and vacant. A beachfront condo in Destin, Florida might average $325 ADR in summer but only 65% occupancy. RevPAR: $325 x 0.65 = $211. That same condo in January: $175 ADR, 40% occupancy, RevPAR of $70. RevPAR captures both pricing power and demand—a more complete performance picture than ADR alone.
Seasonal pricing strategy. Smart short-term rental operators adjust pricing dynamically to optimize between ADR and occupancy. In peak season, push ADR higher—demand absorbs the price increase. In off-season, lower prices to maintain occupancy. The goal isn't maximum ADR; it's maximum RevPAR. A $400 ADR means nothing if the property sits empty 80% of the month. Dynamic pricing tools like PriceLabs, Beyond Pricing, and Wheelhouse automate this optimization based on comparable listings, demand signals, and booking pace.
Market ADR benchmarking. Before purchasing a short-term rental, research ADR for comparable properties in the market. AirDNA provides ADR by property type, bedroom count, and neighborhood. In Gatlinburg, Tennessee, a 3-bedroom cabin averages $225 ADR. In Gulf Shores, Alabama, a 2-bedroom beachfront condo averages $275 in summer, $140 in winter. In Joshua Tree, California, a 2-bedroom modernist home averages $200. These benchmarks determine your revenue projections and whether the property's purchase price makes financial sense.
Real-World Example
Optimizing ADR for a short-term rental in Scottsdale, Arizona.
Rachel purchases a 3-bedroom home near Old Town Scottsdale for $485,000. She lists it on Airbnb and VRBO. Year one, she sets a flat rate of $225/night. Results: 195 nights booked (53% occupancy), $43,875 revenue, $225 ADR, RevPAR of $120.
Year two, she uses PriceLabs dynamic pricing. Peak season (January–April, when snowbirds and spring training visitors flood the market): ADR jumps to $375. Shoulder months (October–December): $250. Summer (May–September, brutal heat): $150. Results: 228 nights booked (62% occupancy), $61,560 revenue, $270 ADR, RevPAR of $169. Revenue increased 40% despite only 33 more booked nights.
The lesson: a flat-rate approach left $17,685 on the table. Peak-season guests would have paid $375—Rachel charged $225. Off-season guests who would have booked at $150 went elsewhere. Dynamic pricing maximized ADR when demand was high and sacrificed ADR for occupancy when demand was low. Her total revenue, not her ADR, is what pays the mortgage.
Pros & Cons
- Simple, intuitive metric—easy to calculate and compare
- Directly measures pricing effectiveness per occupied night
- Benchmarkable using AirDNA, PriceLabs, and public STR data
- Helps identify underpriced or overpriced listings relative to market
- Seasonal ADR data informs revenue projections for purchase decisions
- Ignores vacant nights—a $400 ADR with 30% occupancy means low total revenue
- Cleaning fee treatment varies by platform, complicating comparisons
- Doesn't account for operating costs—high ADR doesn't guarantee profitability
- Seasonal fluctuation makes annual averages misleading for monthly planning
- Comparable ADR data can be skewed by luxury outliers or budget listings in the same market
Watch Out
- Don't chase ADR at the expense of occupancy: A property earning $300 ADR at 50% occupancy ($150 RevPAR) makes less than one earning $200 ADR at 85% occupancy ($170 RevPAR). Optimize for total revenue, not nightly rate.
- Include cleaning fees consistently: When comparing your ADR to market data, make sure you're using the same methodology. AirDNA includes cleaning fees in ADR. If you're excluding them, you'll underestimate your actual ADR and make bad comparisons.
- Verify ADR data before buying: AirDNA and similar tools provide estimates, not guarantees. Cross-reference with actual listings on Airbnb—check booked calendars for properties similar to yours. If AirDNA says $275 ADR but comparable listings are sitting with open calendars at $225, trust the real-time data.
- Factor in platform fees: A $300 ADR on Airbnb becomes ~$255 after the host service fee (3–15% depending on fee structure). Your effective ADR is lower than the listed rate. Account for this in revenue projections.
Ask an Investor
The Takeaway
ADR tells you how much you earn per booked night—Total Room Revenue divided by Number of Rooms Sold. It's essential for pricing analysis but incomplete without occupancy rate context. The real performance metric is RevPAR (ADR x Occupancy), which captures both pricing power and demand. Use AirDNA and PriceLabs to benchmark ADR in your target market, implement dynamic pricing to optimize between rate and occupancy, and always project annual revenue—not just nightly rate—when analyzing short-term rental deals. A high ADR means nothing if the property sits empty.