Average Daily Rate, or ADR, is calculated by dividing the revenue generated from a reservation by the number of days reserved in the booking, including the cleaning fee set by the host.
How do we Calculate ADR?
When determining the income for a short-term rental listing, we include the cleaning fee, as this can be a revenue stream for many hosts and property managers. To calculate the historical ADR, we divide the total revenue of the booking by the number of reserved days. We then factor in the cleaning fee by dividing it by the number of reserved days.
Total Revenue (Daily Rates + Cleaning Fee) / Number of Booked Nights
For example, if a property was booked for 5 days at $250 per night, and the cleaning fee for those 5 nights was $200, the ADR would be $290.
As we include the cleaning fees in the ADR, it is also included in the total revenue figures.
In MarketMinder, we show ADR performance on a market level and for individual properties. The ADR for specific properties (which can be found on the map) shows the ADR over the last 12 months:
Whereas the ADR showing market performance will give you the monthly median average daily rate showing up to five years into the past, and can be found in the Rates tab:
Historical vs. Future Data
MarketMinder shows both historical and forward-looking data points, the cleaning fee is included in the historical figures but not in the forward-looking.
With historical data we’re able to see cleaning fee information, which allows us to factor it into the average daily rate (ADR), and in turn revenue. With future-looking data, cleaning fees are too variable and subject to change to be reliably included in our figures.
Please sign in to leave a comment.