How does AirDNA Calculate ADR (Average Daily Rate)?

We calculate the average daily rate (ADR) for a property by dividing the revenue by the number of booked days in the reservation. 

Total Revenue (Daily Rates + Cleaning Fee) / Number of Booked Days

MarketMinder gives you market-level ADR for the last 36 months. There are multiple factors that need to be taken into account to get an accurate representation of the market performance as a whole. 

What We Include in the ADR

ADR is made up of the booked rate for each day and the cleaning fee. The cleaning fee is averaged out across the number of days in the reservation. (Read more about why cleaning fees are included in ADR totals.

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Seasonality and RevPAR

The time of year can have an impact on the ADR in a market. In ski town markets, for example, you’re likely to see an increase in the daily rate charged in the winter and a decrease in the summer, whereas, in beach markets, you’re likely to see the opposite due to higher demand and hosts being able to increase their rate and capitalize on an influx of guests to the market. 

Although ADR provides valuable insight into how much other hosts are charging in your market, it is not a sufficient indicator of overall performance and should not be managed in isolation. Looking at occupancy as well as the ADR is essential to understand a property’s or market’s performance. Take, for example, a vacation rental whose ADR increased month-over-month, but occupancy dropped, resulting in lower total revenue. 

In MarketMinder, market seasonality and booking lead time indicators help property managers and hosts set more intuitive pricing by providing historical market RevPAR (Revenue Per Available Rental) and future market demand. Managing and analyzing ADR within the context of occupancy is the best approach for those seeking to gain an edge over the competition.

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