Hotel Average Daily Rate (ADR) Formula

The Average Daily Rate (ADR) is a key performance indicator in the hotel industry. It represents the average rental income per occupied room in a hotel or lodging facility for a given period. It helps in understanding the pricing effectiveness and revenue generated from rooms.

The formula to calculate ADR is:

$ADR = \frac{\text{Total Room Revenue}}{\text{Number of Rooms Sold}}$

Given Hotel Data

We are provided with the following information for the hotel chain:

• Total number of rooms: 850
• Number of rooms sold on the particular day: 650
• Total revenue generated on that day: Rs. 975000

The total number of rooms (850) is extra information and not directly needed for the ADR calculation itself, though it provides context about occupancy.

Calculating the ADR

To find the Average Daily Rate (ADR), we need to divide the Total Room Revenue by the Number of Rooms Sold.

Step-by-Step ADR Computation

1. Identify Revenue: The total revenue generated from room sales is Rs. 975000.
2. Identify Rooms Sold: The number of rooms that were actually sold is 650.
3. Apply the ADR Formula: Substitute the values into the formula:

   $ADR = \frac{\text{Rs. } 975000}{650}$

4. Perform the Division:

   $ADR = \frac{975000}{650} = \frac{97500}{65}$

   To simplify the division:

   Divide 97500 by 65:

   $\frac{97500}{65} = 1500$

   Therefore, the Average Daily Rate is Rs. 1500.

Result of ADR Calculation

The calculation shows that the Average Daily Rate (ADR) for the hotel chain on that particular day was Rs. 1500.