ADR and net ADR: what is the difference?
More than 30 years in hotel rooms division, from hostels to five-star chain hotels; focused on revenue management since 2009.
ADR (average daily rate) is your room revenue divided by the number of room nights you sold. Net ADR does the same with room revenue after commission, so it shows the average price you actually keep per night.
The formulas
A worked example
Example figures. (€132,600 − €12,240) ÷ 1,020 = €118.
Why net ADR matters
Two months with the same ADR can earn very different amounts if the channel mix differs. When more nights come through OTAs, ADR stays the same while net ADR drops. Watching both shows whether a higher rate really reached your bottom line.
Common mistakes
- Mixing figures incl. and excl. VAT, for example a budget excl. VAT against actuals incl. VAT
- Counting the departure day as a night, which lowers ADR
- Including breakfast or extras in room revenue in one month and not in the next
RevView shows ADR and net ADR side by side, per month, per channel and against the same time last year.
Questions
Is ADR the same as average room rate?
In practice yes: both are room revenue divided by room nights sold.
Does ADR include VAT?
That depends on the source. Agree on one basis and use it everywhere, also in your budget. RevView lets you switch between incl. VAT, excl. VAT and net of commission.