ADR measures pricing power: of the rooms you actually sold, what did each earn on average? It's calculated as room revenue ÷ number of rooms sold, and it deliberately excludes unsold rooms (that's what occupancy and RevPAR capture). A rising ADR means you're selling at higher rates or shifting toward higher-value room types.
ADR is most useful read alongside occupancy: a high ADR with low occupancy may signal over-pricing, while a low ADR with full occupancy may mean there's room to charge more.
Why it matters for direct booking
Your effective ADR is lower than it looks once distribution cost is deducted — an OTA's commission comes straight off the rate. Direct bookings preserve the full ADR, which is why the channel mix matters as much as the headline rate.