ADR, net ADR and triple net ADR

Vikram Aditya Singh

Measuring ADR or ARR should always come with a line of sight on NETADR & TRIPLE NET ADR.

So in simple terms:

ADR = Room Revenue divided by number of rooms nights sold.

NET ADR = (Room Revenue LESS Cost of Distribution ) / Number of Rooms Nights Sold.

TRIPLE NET ADR = (Room Revenue LESS Cost of Distribution LESS Cost of Acquisition (sales and marketing related expenses in selling the rooms) ) / Number of Rooms Nights Sold .

We should analyse the comparison between all 3 as well as find out how it fares seasonally as well as different time periods.

This should affect the variable costs of the business as a whole.

More detailed insights into this interesting concept soon.

Do you suppose that Brand / Chain operated hotels have an advantage on triple net ADR or independent Hotels ?

First published on LinkedIn. Any workbook or deck the note mentions is attached to the original post.

Also in Revenue & distribution

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ADR, net ADR and triple net ADR

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