Is it true that Net ADR is always larger than ADR?

Net ADR (Average Daily Rate) is not always larger than the ADR; in fact, it is often lower than or equal to the ADR due to the deductions that are considered when calculating Net ADR. ADR represents the average rental income per paid occupied room and is calculated without taking any deductions into account. On the other hand, Net ADR accounts for various adjustments, such as discounts, commissions, taxes, and other fees that might be subtracted from the gross rental income.

This means that Net ADR provides a more accurate representation of the actual revenue received from room rentals, as it reflects the income after these deductions are applied. As a result, it is not correct to assume that Net ADR will always be larger than the standard ADR; in practice, the opposite is often true. Understanding this distinction is essential for accurately analyzing a hospitality business's financial performance.