When renting out a property, being aware of the local ADR is key to predictability. Knowing the ADR means having an estimate of what future revenue, profit, and more may have in store!
What is Average Daily Rate?
Average Daily Rate, commonly abbreviated to just “ADR” is a measure of the expected rate of your listing at any given time on a daily basis. ADR is based off of many factors to create an average such as what other listings are being booked at, what past seasonality has been, and how many units are currently available.
It is common for ADR to change nearly every day based on these factors, therefore we recommend staying updated on what your competition is doing to update their pricing. Vacation rental platforms such as Airbnb have built-in pricing tools that help, but if you’re looking to get more serious, check out a PMS such as Guesty, or even have Away Agents do it for you.
What is the ADR for a Vacation Rental in Vail?
The ADR for Vail is $416, not too bad! As mentioned, Vail’s ADR comes from a spectrum of different factors which are important to note before assuming $416 is the rate you will always receive – here’s what they are and why.
Compared to other markets, Vail’s ADR experiences an incredibly high peak in February ($670) with May and October providing lower ADR’s depending on the ski season (approximately $300 for each month respectively). Not only does Vail’s demand fluctuate given its strong tourist economy, but thanks to the wide range of properties offered, there is also a fluctuation in perceived value in each listing. This means that anything from an 8 bedroom mansion to a 1 bedroom studio apartment are factored into the $416 average.
How to Calculate an Accurate ADR
With all of the factors previously mentioned, it’s important to know how to find your own ADR! For this, we recommend a tool airdna.co offers called “Market Minder”. Essentially, all you have to do is input your address and Airdna will calculate all the variables automatically! They will even provide graphs and similar properties in Vail. Of course, Market Minder isn’t free, so if you’re looking to do it manually just compare some similar properties to yours. This method will at least generate some competitive pricing for your listings.