What it means
Start with the nights guests actually bought. Add the accommodation revenue assigned to those nights and divide by their count: that is ADR, or average daily rate. A three-night reservation contributes three sold nights, even if it arrived as one payment. Keep taxes, cleaning and other extras outside the accommodation total.
Why it matters
Use ADR to investigate the bookings behind a price change. A week of discounted long stays can lower the average while advertised prices remain the same. Separate studios from larger apartments and compare similar dates before changing prices across the whole property.
An example in practice
An eight-apartment property sells 168 nights during February and records COP 47,040,000 for accommodation on those nights. Its ADR is COP 280,000. This tells the team what the sold nights earned; the 56 nights left empty require a separate look at occupancy.
47,040,000 ÷ 168 = 280,000 COP
Accommodation revenue excluding tax and cleaning / sold nights in the month.
A mistake to avoid
Do not give a small booking the same weight as a long one. Two nights at COP 400,000 and eight at COP 250,000 earn COP 2,800,000 across ten nights. Their combined ADR is COP 280,000. Taking the midpoint of the two prices would incorrectly report COP 325,000.
Put it into practice
- Use accommodation earned on the selected stay dates, in one currency.
- Divide total revenue by sold nights instead of averaging booking prices.
- Check discounts and unit mix before changing the published rates.
A common question
What should I show when no apartment-night sold?
Show that ADR is unavailable, alongside zero sold nights. There is no sale price to average in that period. A zero ADR would suggest nights were sold for nothing, which tells a different story and could mislead a pricing decision.