10 ways to increase your short-term rental ADR (Average Daily Rate)

The Average Daily Rate (ADR) is like a report card for a property’s short-term rental performance. It tells you how much money the property is making each night, which helps you figure out if it’s making a profit and how to price it right.

By monitoring the ADR, property owners can see if their rental prices are working. If they’re making more money during peak seasons, they can raise prices. If they’re not making enough during off-peak seasons, they can lower prices to get more people to stay.

How do you compute the average daily rate?

The ADR is calculated by dividing the total revenue earned from the property by the total number of booked nights. This includes all the money made, like the base rental rate, cleaning fees, and any extra charges. It doesn’t include any nights when the property wasn’t available for booking or nights when people didn’t pay.

Let’s say a property made $10,000 in a month and was booked for 20 nights. The ADR would be $10,000 divided by 20, which equals $500. That means the property made an average of $500 per night that it was booked.

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‍What are the factors that influence average daily rate?

Property owners can tweak their pricing strategy based on these factors that affect the ADR of a short-term rental property:

• Location of the property
• Size and quality of the property
• Time of year
• Demand for short-term rentals in the area

For instance, a property in a popular tourist spot might fetch a higher ADR during peak tourist season. On the other hand, a larger or more luxurious property could charge a higher rate than a smaller or less well-appointed property.

How do you improve the average daily rate of your property?

Here are ten key strategies you can use to improve your short-term rental property’s ADR:

1. Optimise pricing strategy

During peak periods like holidays or festivals, increase your rates strategically. Setting minimum stay requirements (e.g., three-night stays) can reduce turnover costs while discouraging one-night bookings that often lower ADR. Consider offering early-bird discounts for guests who book well in advance, while charging premium rates for last-minute reservations to capitalise on urgency-driven bookings.

2. Enhance property appeal

Invest in professional photography to highlight your property’s best features and justify higher rates. Upgrade amenities to meet guest expectations—think high-speed Wi-Fi, smart TVs, premium linens, and luxury toiletries. Small but thoughtful additions like a welcome basket with local treats, a curated guidebook, or complimentary bike rentals can make a big difference in the guest experience. These touches make guests feel valued, allowing you to charge higher prices and get positive reviews.

3. Improve listing quality

Your listing’s title and description should be clear and exciting. For instance, “Luxury Downtown Loft with Rooftop Skyline Views” is way better than just saying “Downtown Loft.”

Highlight the nice stuff like a hot tub, workspace, or being close to tourist spots. If you want to keep your rating at 4.8 or higher, make sure your place is always clean, you talk to your guests well, and you have all the cool amenities they want.That way, you’ll get great reviews and people will pay more for your place!

4. Target high-value guests

Think about who you want to attract. Business travellers, for example, want a dedicated workspace and fast Wi-Fi. They often book during weekdays and pay more. Don’t overuse discounts, though. That can attract budget-conscious guests and make your place seem less special. Instead, make your rental stand out from the competition.

5. Reduce vacancies strategically

Use automated booking tools to quickly accept reservations and keep your calendar full. Adjust your minimum stay requirements based on the season. For example, you can increase the minimum stay during off-peak times and decrease it during peak times. You can also offer discounts on weekdays (like 10% off Sunday through Thursday) to fill slower periods without affecting your weekend rates.

6. Offer upsells and add-ons

Generate ancillary revenue by offering paid extras like early check-in, airport transfers, or pet fees. Themed packages (e.g., Romantic Getaway with champagne and chocolates) can also increase per-guest spending. Bundling services into your nightly rate (e.g., including cleaning fees) also creates a seamless, high-value perception.

7. Monitor competitors and adjust

Keep an eye on similar listings in your area. If your property has better amenities or abetter location, you can price it a bit higher than the others. Also, watch how often these properties are rented out and how much they’re going for. This will help you figure out if you can raise your prices without losing customers.

8. Leverage multiple booking channels

Go beyond Airbnb and list your property on platforms like VRBO or Booking.com, which are great for travellers who want to splurge. Also, consider using Airbnb management with a big network of corporate clients.

9. Streamline operations

Level up your check-in with smart locks and digital guest guides. Optimise cleaning schedules so you can squeeze in back-to-back bookings without any downtime. That means higher rental returns and happier guests.

10. Test and refine continuously

Try different pricing strategies, like seasonal vs. dynamic. Keep an eye on things like occupancy and revenue per available night (RevPAN). Use the data to make your approach better and better.

Small changes, like high-thread-count sheets or a Nespresso machine, can make a big difference in how much people think your hotel is worth. Just focus on giving your guests the best experience, and they’ll be happy to pay a bit more.‍

Improve the average daily rate of your property with MadeComfy

Elevate your short-term rental returns with MadeComfy, Australia’s top Airbnb management partner.

We make sure your property is seen by as many people as possible by listing it on all the major booking sites. We also have access to Australia’s biggest corporate travel network, so you can book high-value business trips.

Our smart property management keeps you in the loop with real-time updates through the MadeComfy Dashboard. We use data-driven optimisation, which means we look at over 80 million data points, to make sure your prices bring in the best rental returns.

We take care of everything from making sure your guests have a great time (thanks to our Guest Hub) to using AI to make sure your check-ins and check-outs are smooth and easy. We want you to be comfy and happy, so we handle all the details for you.

Ready to improve your property’s ADR and increase your rental returns? CONTACT US at MadeComfy today!