What is indicated by the average daily rate (ADR) metric in the hospitality sector?

The average daily rate (ADR) metric is a critical performance indicator in the hospitality sector, specifically used to assess hotel revenue performance. ADR represents the average revenue earned for each rented room over a specific period. It is calculated by dividing the total room revenue by the number of rooms sold. This metric provides insights into pricing strategies, revenue management, and market demand, allowing hotel managers and owners to evaluate how effectively they are generating revenue from their room inventory.

While other options such as total profit margin, average number of guests, and occupancy rates provide valuable information related to hotel management, they do not directly relate to the concept of ADR. Thus, recognizing ADR as the revenue generated per sold room crucially highlights its role in guiding pricing and revenue optimization strategies in the hospitality industry.