Net ADR Yield
Net ADR Yield measures how much of a hotel's advertised room rate actually reaches the property after all channel costs are deducted. It expresses the net rate received as a percentage of the gross rate sold, making it possible to compare the true value of a booking across channels that charge very different commissions, margins, and transaction fees. A €200 direct booking and a €200 OTA booking look identical in ADR reporting; Net ADR Yield is the metric that separates them.
Formula
Net ADR Yield = Net ADR received ÷ Gross ADR sold × 100
Where Net ADR received = gross rate − commission − transaction and card fees − attributable acquisition cost, and Gross ADR sold = the rate the guest paid.
Example
A hotel sells the same €200 room night through four channels:
| Channel | Gross ADR | Deductions | Net ADR | Net ADR Yield |
|---|---|---|---|---|
| Brand website | €200 | €9 (booking engine + payment + brand search) | €191 | 95.5% |
| Metasearch | €200 | €24 (CPA fee + payment) | €176 | 88.0% |
| OTA (17% commission) | €200 | €37 (commission + VCC fee) | €163 | 81.5% |
| Wholesale (25% net rate) | €150 | €3 (payment) | €147 | 73.5% |
The wholesale booking yields roughly 77 cents for every euro the direct booking yields, even though both fill the same room.
Why it matters
Occupancy and ADR targets can be hit while profitability erodes, because gross rate reporting hides what distribution takes off the top. Net ADR Yield gives revenue managers a per-booking view of that erosion, which is the level at which most channel decisions are actually made: whether to accept a wholesale contract, how high to bid on metasearch, whether an OTA promotion is worth the visibility, or how much a loyalty discount can be widened before it beats the OTA it is meant to replace. It also reframes "book direct" campaigns as a yield question — a direct booking is only better if its acquisition cost leaves more net rate on the table than the OTA it displaced.
Caveats
The metric is only as honest as its cost allocation. Brand search spend, loyalty redemption liability, and channel manager subscriptions are frequently omitted, which flatters the direct channel. Net ADR Yield also ignores volume: a low-yield channel that fills otherwise empty room nights can still be the right commercial choice on a soft date.
Related
- Cost of Distribution — the same idea aggregated at portfolio level
- NRevPAR (Net Revenue per Available Room) — net performance across all available rooms
- Channel Mix — the distribution of business this metric is used to steer
- Wholesale / Net Rate — typically the lowest-yielding channel in the stack