What Is ADR? Average Daily Rate for Hotels Explained

ADR shows what a sold room earns on average. How it is calculated and what it reveals about a hotel.

By Michael Külbel 2 min read

Graphic: in 2025, room occupancy in Germany rose to 68.1 per cent while the average net room rate fell by 2.8 per cent to 109 euros
Key figures from the German Hotel Association for 2025. Graphic: eingecheckt.de
Key points
  • ADR stands for average daily rate: the average price a hotel achieves per room sold per night.
  • According to the German Hotel Association, the average net room rate fell by 2.8 per cent to 109 euros in 2025, even though occupancy rose.
  • ADR is calculated as room revenue divided by room nights sold.
  • Only together with occupancy does ADR show how well a hotel sells its rooms.

What does a room bring in on average? That question is answered by ADR, the average daily rate. Alongside occupancy, it is one of the metrics found in every monthly report, and it explains why a full hotel does not necessarily mean a good result.

What ADR measures

The average daily rate indicates how much room revenue a hotel earns on average per room night sold. It is usually calculated net, that is, excluding VAT, and without revenue from breakfast, the restaurant or the spa.

How ADR is calculated

The formula is simple: room revenue divided by room nights sold. An example: in June, a hotel earns 99,000 euros net from overnight stays and has sold 900 room nights. Its ADR is 99,000 divided by 900, or 110 euros.

What goes into room revenue matters. If a package rate includes breakfast or dinner, that share is usually deducted. Hotels that do not do this consistently end up comparing months or years on different terms.

How ADR has developed in Germany

According to the industry report by the German Hotel Association (IHA), the average net room rate fell by 2.8 per cent to 109 euros in 2025. At the same time, room occupancy rose by 0.9 percentage points to 68.1 per cent. According to the report, revenue per available room (RevPAR) fell to 74 euros.¹

Hotels were fuller, then, but earned less per room. At the same time, business insolvencies in traditional accommodation rose by 40.1 per cent, according to the IHA.¹

Why ADR only means something alongside occupancy

A high ADR alone is no success if many rooms stay empty as a result. High occupancy alone is no success either if rooms are sold too cheaply. That is why hotels combine the two into RevPAR, room revenue per available room: occupancy multiplied by ADR. With the industry figures for 2025, that gives 68.1 per cent times 109 euros, or around 74 euros.

What hoteliers should look for

Checklist: using ADR properly
  1. Calculate net: Calculate ADR excluding VAT and without breakfast or other services.
  2. Split by segment: Business travellers, groups and leisure guests pay different rates. An overall ADR hides this.
  3. Split by channel: What is left after commission? A platform booking earns less than a direct booking at the same ADR.
  4. Review rates regularly: When were rates last adjusted? Season, day of the week and demand belong in the calculation.

More in the magazine

Why hotels often lose money on the revenue side, for example through room rates that are rarely adjusted, is the subject of our article "Digitalised – and still flying blind?". Where room rates and revenue come together is explained in the glossary entry "What Is a Hotel PMS?".

Sources

This glossary entry is based on the following source:

  1. Tageskarte (2026)
    IHA präsentiert Branchenreport Hotelmarkt Deutschland 2026
    Trade article, 13 May 2026. Key figures from the German Hotel Association (IHA) for 2025: room occupancy, average net room rate, RevPAR, overnight stays, insolvencies. Original publication in German.
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