Hotel terms, in plain words
The words booking sites, revenue managers and software companies use, each explained the way you would explain it to a new manager: what it means, how to work it out, and what to do with it. Where there is a sum, there is a calculator to try it on your own figures.
Measuring performance
- With a calculatorAverage room rate (ADR)Average room rate, or ADR, is what a sold room brings in on average. The formula, a calculator, a worked example and what to do with it.Read more
- With a calculatorRevPARRevPAR, revenue per available room, is your room revenue spread over every room you had to sell. The formula, a calculator and a worked example.Read more
- With a calculatorOccupancy rateOccupancy rate is the share of your rooms that sold. How to calculate it, which rooms to count, a calculator, and what to read beside it.Read more
- Hotel termGross operating profit (GOP)Gross operating profit, or GOP, is what a hotel earns from running itself, before rent, loans and tax. How to work it out, a worked example and how to raise it.Read more
- With a calculatorGOPPARGOPPAR, gross operating profit per available room, is what each room you had left after the hotel's running costs. The formula, a calculator and an example.Read more
- With a calculatorTRevPARTRevPAR, total revenue per available room, counts all the hotel takes, not only rooms, over every room it had to sell. The formula, a calculator and an example.Read more
- Hotel termNet operating income (NOI)Net operating income, or NOI, is what a hotel earns after its running and building costs, before loans and tax. How it is worked out, an example and its uses.Read more
- With a calculatorAverage rate index (ARI)ARI, the average rate index, sets your average room rate against your competitors'. What 100 means, how to choose competitors, a calculator and an example.Read more
- With a calculatorMarket penetration index (MPI)MPI, the market penetration index, sets your occupancy against your competitors'. What 100 means, how to choose competitors, a calculator and an example.Read more
- With a calculatorRevenue generation index (RGI)RGI, the revenue generation index, sets your RevPAR against your competitors' to show whether you won your share of the money. A calculator and an example.Read more
- Hotel termSTR report (STAR)An STR or STAR report, from STR (once Smith Travel Research), sets your hotel against competitors you choose. What is in it, how to take part, how to read it.Read more
- With a calculatorBreak-even occupancyBreak-even occupancy is the share of its rooms a hotel must sell to cover its costs. The formula, a calculator, a worked example and what moves it up or down.Read more
- Hotel termCost per acquisition (CPA)Cost per acquisition, or CPA, is what each booking costs to win: commission, ads and fees. How to work it out for each booking site and your own website.Read more
Prices and revenue
- Hotel termRack rateA hotel's rack rate is its full published room price, before any discount. What it means now, how it differs from your best available rate, and how to set it.Read more
- Hotel termBest available rate (BAR)BAR, the best available rate, is the price open to anyone for a night, and the price your other prices are set from. What it is, how it moves and how to set it.Read more
- Hotel termDynamic pricingDynamic pricing means changing your room prices with demand, night by night. What to price from, how to do it by hand or with software, and the rules to keep.Read more
- Hotel termRevenue managementRevenue management: the right room for the right guest, at the right time and price. What it covers, how it differs from yield management, and where to start.Read more
Booking sites and distribution
- With a calculatorBooking-site commissionWhat a booking from a booking site really leaves your hotel, after any discount, the commission and the tax on the commission. A calculator and an example.Read more
- Hotel termOnline travel agency (OTA)OTA stands for online travel agency: a booking site such as Booking.com, Agoda or MakeMyTrip. How they work, how they are paid, and how they differ from Google.Read more
- Hotel termStop sellA stop sell closes a room type or a date on a booking site, so no more guests can book it. When hotels use it, how to set it, and what closed to arrival means.Read more
- Hotel termMetasearchGoogle Hotels, Tripadvisor, Trivago and Kayak are metasearch: they compare hotel prices and send guests elsewhere to book. How it works, and free listings.Read more
- Hotel termChannel managerA channel manager sends your prices and rooms to every booking site at once and brings their bookings back. What it does, what it doesn't, and how to check it.Read more
- Hotel termGlobal distribution system (GDS)GDS stands for global distribution system: the network travel agents and companies book hotels through. How it works, how a hotel joins and what to ask.Read more
- Hotel termBooking engineA booking engine takes bookings and payments on your hotel's own website. How it works with your PMS and Google, what it costs, and how to check yours.Read more
- Hotel termProperty management system (PMS)A PMS runs a hotel's rooms, check-ins and bills. What a property management system does, how it connects to booking sites, what it costs, how to choose.Read more
- Hotel termDirect bookingA direct booking is one a guest makes with your hotel, not a booking site. What it is worth, what your contracts allow, and how to win more of them.Read more
- Hotel termNet rateA net rate is what a hotel receives for a room after the seller's commission or margin. How it differs from a sell rate, with the sums and what to check.Read more
- Hotel termMember rateA member rate is a lower price a booking site shows only to its members, app users or chosen countries. How Genius, MMTBLACK and the rest work, and their cost.Read more
- Hotel termNon-refundable rateA non-refundable rate is a lower price the guest pays in full even if they cancel or don't arrive. How to price and set one up, and what it costs you.Read more
- Hotel termCancellation policyA cancellation policy says when guests can cancel for free and what they pay after. The kinds, and how to set one on Booking.com, Expedia, MakeMyTrip and Agoda.Read more
- Hotel termRate planA rate plan is one way to book a room: a price with its cancellation rule, meals and conditions. The kinds, linked rate plans, and how to set them up.Read more
- Hotel termGoogle Hotel AdsGoogle Hotel Ads are the paid booking links beside a hotel's prices on Google. How the auction works, the ways to bid, what you need first, and when they pay.Read more
Sales and groups
- Hotel termMICEMICE stands for meetings, incentives, conferences and exhibitions. What each brings a hotel, how the deals and contracts work, and how to win them.Read more
- Hotel termDestination management company (DMC)DMC stands for destination management company: the local firm that arranges groups' stays, tours and events. How DMCs buy rooms, and how to work with them.Read more
- Hotel termConsortiaConsortia are groups of travel agencies, or of hotels, that buy and sell together. What a consortia rate is, what programmes ask of a hotel, and when it pays.Read more
- Hotel termCorporate rateA corporate rate is a room price agreed with one company for its staff, often for a year. How to set it, what to agree in writing, and a worked example.Read more
- Hotel termAllotmentAn allotment is a number of rooms a hotel holds for a travel agent or tour operator to sell until a release date. How the contract works, with an example.Read more
- Hotel termRelease periodThe release period is how many days before arrival an agent or group must book the rooms held for it, before the rest come back to you. With an example.Read more
- Hotel termGroup bookingHow a hotel group booking works: the room block, the group rate, the cut-off date, the rooming list and attrition, what to put in writing, and how to price one.Read more
- Hotel termFIT and GITFIT means free independent travellers and GIT group inclusive tours. What each means for a hotel, how their rates and contracts differ, and an example.Read more
- Hotel termTravel agent commissionHow hotels pay travel agents: commissionable rates against net rates, what commission is paid on, when it is due, how agents are known, and an example.Read more
- Hotel termSMERFSMERF means social, military, educational, religious and fraternal groups. What each looks like in India, how they book and pay, and how to price them.Read more
Day to day
- With a calculatorLength of stay (LOS)Length of stay is how many nights a booking lasts. The average length of stay formula, a calculator, and how minimum stay rules work on booking sites.Read more
- Hotel termPickupPickup is how many rooms you sold for a coming night since you last looked. How to count it, read a pickup report and act on it while there is still time.Read more
- Hotel termBooking paceBooking pace is how fast rooms sell for a coming date against the same point last year. How to build a pace report, read it and price each night by it.Read more
- Hotel termLead timeLead time, or booking window, is how many days before arrival a guest books. How to work it out, where booking sites show it, and how to price by it.Read more
- Hotel termDisplacementDisplacement is the business a group pushes out. How to do a displacement analysis for a group, wedding or company, with a worked example, before you say yes.Read more
- Hotel termOverbookingOverbooking is confirming more bookings than you have rooms. What Booking.com, Agoda, Expedia and MakeMyTrip ask of you, and how to walk a guest well.Read more
- Hotel termNo-showA no-show is a guest who never arrives or cancels. How to mark one on Booking.com, Agoda and Expedia, the deadlines, the fees and the commission on them.Read more
- Hotel termWalk-inA walk-in is a guest who arrives without a booking. How to price the room, check the guest in, keep the booking sites in step and win more walk-in guests.Read more
- Hotel termDay useDay use is selling a room for a few hours in the day. How MakeMyTrip's Hourly Stays work for hotels, how to price the slots, and how to protect your nights.Read more
- Hotel termEarly check-in and late check-outEarly check-in and late check-out let guests arrive before or stay after your set times. How to set the times, charge for the hours and show it on every site.Read more
- Hotel termRoom nightsA room night is one room sold for one night. How to count room nights, why hotels and booking sites measure in them, and how they feed every other figure.Read more
Rooms, meals and kinds of hotel
- Hotel termRoom typesStandard, deluxe or suite: what each room type means, what India's star rules say about room sizes and suites, and how to set room types up on booking sites.Read more
- Hotel termMeal plansEP, CP, MAP and AP, the meal plans Indian hotels and booking sites use: what each includes, how to price it, and how to set it up on Booking.com and MakeMyTrip.Read more
- Hotel termHotel star ratingHow India's Ministry of Tourism grades hotels from one star to five-star deluxe, what the HRACC checks, its fees, and how booking sites and Google show stars.Read more
- Hotel termFOCFOC means free of charge: a room or meal a hotel gives at no cost, most often to a group's leader. How groups ask for it, how to agree it, and how to count it.Read more
- Hotel termUpsellingUpselling is selling a guest a better room or an extra they want. How hotels do it at booking, before arrival and at check-in, and how to set it up online.Read more
- Hotel termFolioA folio is a guest's running bill: every charge and payment from check-in to check-out. Guest, master and split folios, GST on the bill, and booking-site stays.Read more
- Hotel termSingle and double occupancySingle and double occupancy are a room's price for one guest and for two. How Indian hotels quote them, extra adults and beds, and how to set them up online.Read more
- Hotel termBoutique hotelA boutique hotel is a small hotel with its own character. What the word means in India, what the rules and booking sites say, and how to show what is different.Read more
- Hotel termHomestayA homestay is a home where guests stay with the family who live there. How India's Ministry of Tourism and the states define one, and how to list it online.Read more
- Hotel termHeritage hotelA heritage hotel in India runs in a palace, fort, haveli or home built before 1950. The Ministry's three categories, the building rules, and selling one online.Read more
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