What is ADR? Start with 1 night, and you'll get it in 2 minutes

ADR sounds like hotel talk. It's really 1 simple question: when a night gets booked, how much money does it bring in, on average?

Let's build it from 1 night.

2:50Play the video: How to Calculate Airbnb ADR: Average Daily Rate Explained in Under 3 Minutes, 2:50

Start with 1 night. Then try a whole week

1 night booked at RM200 brings in RM200. Easy.

Now a week, where weekends cost more and some nights sit empty. What does a booked night bring in now?

Book your own week

Each box is 1 night, with its price in RM. Tap a night to book it or leave it empty.

4 booked nights

=

ADRRM220

RM880 made from 4 booked nights. ADR is RM220.

Not counted:

Now tap Monday, and watch the sum.

That number is ADR:

ADR equals money made divided by nights bookedADR=money madenights booked

Why empty nights don't count

Think of a nasi lemak stall

In the morning the stall wraps 14 packets. By noon it sells 10, at RM3 each. 4 are left, and tomorrow they can't be sold.

RM30

in the tin

Count sold packets only Count every packet

RM3010 sold=RM3

Right. Each packet sold brought in RM3.

ADR works the same way. A night nobody booked is a packet nobody bought: it brought in RM0, so it stays out of the sum.

So ADR answers "how much per booked night?" How full the calendar was is a different question, called occupancy: nights booked ÷ nights open.

Try your own month:

Work out your own ADR

Type in 1 month from your statement. The answers change as you type.

Money made in the monthRM Nights booked Nights open

ADR

RM200

RM4,80024 nights booked

Occupancy

80%

24 nights booked30 nights open

RevPAR

RM160

RM4,80030 nights open

ADR vs RevPAR: can a higher price make less money?

Guess first:

Quick guess

Unit B charges more a night. Which unit fills its month with more money?

BookedEmpty

Unit ARM200a nightMakes RM900 more

24 nights × RM200 = RM4,800

?

Unit BRM260a night

15 nights × RM260 = RM3,900

?

Unit AUnit B

Unit A makes more. Its price is lower, but 9 more nights were booked.

RevPAR spreads each month's money over all 30 nights, booked or empty. One number for price and empty nights together.

Unit ARM4,80030 nights=RM160

Unit BRM3,90030 nights=RM130

A higher ADR can make less money if it leaves more nights empty. So look at ADR and occupancy together. Or use RevPAR, 1 number that shows both:

RevPAR equals money made divided by nights open equals ADR times occupancyRevPAR=money madenights open=ADR × occupancy

Unit A: RM200 × 80% = RM160. Unit B: RM260 × 50% = RM130.

It can go the other way too: a higher price with fewer nights can make more. RevPAR counts money in, not costs, so check cleaning costs as well.

Thinking of a discount to fill more nights? See is Airbnb's 15% top-rated guest discount worth it?

Same booking, 3 ADRs: why statements disagree

Here's the twist. "Money made" can mean different money.

One booking, 3 ADRs

1 booking, 3 nights. Here is all the money in it:

• RM600room, 3 × RM200
• RM90cleaning fee
• RM93Airbnb's fee on the room

The same 3-night booking counted 3 ways

Way of counting	The sum	ADR
Room price onlyHotels	RM6003 nights	ADRRM200
Plus the cleaning feeAirbnb's dashboard, AirDNA	RM600+RM903 nights	ADRRM230
After Airbnb's feeRoomGuru statements	RM600−RM933 nights	ADRRM169

None of the 3 is wrong. Each one counts different money.

Every manager makes their statement their own way, so only compare ADRs counted the same way. Airbnb's own dashboard is closest to the RM230 way: its "average nightly revenue" includes the fees you charge and is counted before Airbnb's fee.

On our statements, ADR is the line "Avg. nightly rate". It's counted after Airbnb's fee and before the management fee. How your fee is worked out is set by your own contract, not by this article.

Next statement: 3 checks so you stop worrying

Your next statement: 3 checks

• Which ADR is it?The nightly price, with the cleaning fee, or after fees. It may have another name, like "average nightly rate". No ADR on it? Work it out with the calculator above.
• Is occupancy next to it?ADR alone never tells you how the month went.
• Same month last year?Prices change in busy and quiet months, so comparing with last month can trick you.

0 of 3 checked

For the rest of the statement, read how to read your manager's monthly statement.

It's number 1 of our 3 Airbnb numbers every owner should know.

Questions owners ask

What does ADR mean on Airbnb?

ADR means average daily rate: the average money each booked night brings in. Airbnb's own dashboard doesn't say ADR. It shows "average nightly revenue", which includes fees you charge, like cleaning, and is counted before Airbnb's fee.

How do you calculate ADR?

Divide the money your bookings made by the number of nights booked. 24 booked nights that made RM4,800 give an ADR of RM200. Empty nights are left out.

Why does my statement show a different ADR from my Airbnb price?

Your Airbnb price is what the guest sees for 1 night. Your statement may add the cleaning fee in, or take Airbnb's fee out. Every manager makes their statement their own way, so ask what yours counts.

Does ADR include the cleaning fee?

It depends who counts it: hotels count the room price only. Airbnb's "average nightly revenue" and AirDNA, a rental data site, include it. Some statements, ours included, leave it out and take Airbnb's fee off too.

What is the difference between ADR and RevPAR?

ADR is money made ÷ nights booked. RevPAR is money made ÷ every night the home could be booked. RevPAR equals ADR × occupancy, so it shows the price and the empty nights in 1 number.

Sources: Hotel ADR is room revenue ÷ rooms sold, with only room revenue counted: Hotel Online, following the hotel industry's accounting rules (USALI). AirDNA's ADR "include[s] the cleaning fee set by the host but do[es] not include Airbnb service fees": AirDNA Help Centre. Airbnb's "average nightly revenue" is "the average amount of money you've received from a booking, including fees you charge, before our service fee, taxes, or any other fees are deducted", and its occupancy rate is "your nights booked at your listings divided by the total available nights": Airbnb Help Centre. Airbnb's host fee: most hosts on the split fee pay 3%; the single fee is a must for hosts who use property management software, and most of them pay 15.5%; host fees are "a percentage of the nightly price and any fees charged by the host": Airbnb Help Centre. Airbnb's fee can differ by host and country. How RoomGuru counts ADR: our own statement. The prices, bookings and units in this article are made-up examples. This is general information, not financial advice.