Lodging Industry Terminology

ADR (Average Daily Rate)

Rooms revenue divided by rooms sold (excluding complimentary rooms) for a period; a core pricing KPI used with occupancy to assess performance.

Our ADR grew 4% year over year.; Raise BAR to protect ADR during compression.; Group rate must be above CPOR to avoid diluting ADR.

ALOS (Average Length of Stay)

Total room nights divided by number of reservations; used to set minimum/maximum stay controls and forecast housekeeping loads.

Weekend ALOS is 2.4 nights.; Set a 2-night minimum LOS over the festival.; Corporate segment ALOS declined from 2.1 to 1.8.

BAR (Best Available Rate)

The lowest unrestricted, publicly available transient rate for a given date; baseline off which discounts and negotiated rates are derived.

Offer member rate at BAR minus 5%.; Close out BAR when only suites remain.; Corporate LNR is BAR minus 10% midweek.

Banquet Event Order (BEO)

Detailed document for catered events specifying menus, setups, timelines, audiovisual, and billing; the operational blueprint for banquet execution.

Client signed the BEO by the deadline.; Add vegetarian count to the BEO.; House sets ballroom per the BEO diagram at 6 pm.

Booking Curve

Cumulative reservations plotted against days to arrival; visualizes pace versus prior years and forecast to guide pricing and restrictions.

We’re 8 points behind last year’s curve for Marathon weekend.; Shift demand forward by adding a 21-day AP offer.; RM adjusted forecast after pickup shifted the curve.

Booking Engine

The hotel’s direct online reservation application (often on brand.com) that displays rates and availability, collects payment, and issues confirmations.

Conversion on the booking engine improved after UX changes.; Add upsell offers to the booking engine path.; Integrate the booking engine with CRM for member pricing.

Booking Window

The time between reservation creation and arrival date; varies by segment and channel and influences pricing tactics.

OTAs have a shorter booking window than direct.; Advance purchase rate targets a 21+ day window.; Group booking window for tech conferences is 9–12 months.

CapEx (Capital Expenditure)

Long-term investments in property, building systems, or FF&E; capitalized and depreciated, typically planned via multi-year budgets and PIPs.

Allocate CapEx for guestroom soft goods refresh.; Chiller replacement is a 2026 CapEx item.; Lender requires a 5% FF&E/CapEx reserve.

Channel Manager

Software that synchronizes availability, rates, and inventory across PMS/CRS and third-party channels to prevent over/under-selling.

Push weekend rate changes through the channel manager.; Mapping errors in the channel manager caused parity issues.; Close out OTAs via the channel manager due to sellout risk.

Comp Set (Competitive Set)

Curated group of comparable hotels used for benchmarking performance, pricing, and share.

We’re adding the new lifestyle hotel to our comp set.; RGI improved after rebalancing the comp set.; Price at or above the comp set on high-demand nights.

Compression

Market condition where demand approaches or exceeds supply, reducing discounting and enabling higher rates.

Citywide event created compression downtown.; Close discounts during compression nights.; Compression lifted ADR by 15% last quarter.

CPOR (Cost per Occupied Room)

Average operating cost directly attributable to an occupied room (e.g., housekeeping, laundry, amenities, utilities); informs floor pricing and packaging.

Ensure promo rate exceeds CPOR plus acquisition costs.; Suite CPOR is $12 higher than standard rooms.; Use CPOR to evaluate breakfast-included offers.

CRS (Central Reservation System)

Centralized system holding inventory and rates and distributing them to brand.com, call centers, GDS, and connected partners.

Load the new rate plans in the CRS.; CRS outage impacted GDS availability.; Sync PMS and CRS room type mappings.

Cut-off Date

The last date group guests can book within a block before unsold rooms are released back to general inventory.

Cut-off is 21 days prior to arrival.; Extend the cut-off due to slow pickup.; After cut-off, block rooms return to house inventory.

Direct Booking

Reservation sourced via owned channels (brand website, app, voice), typically at a lower cost of acquisition than intermediaries.

Member rate drives direct bookings.; Shift budget from OTAs to direct metasearch.; Track NRevPAR by direct vs OTA.

Displacement Analysis

Assessment of whether taking business (often a group) would displace more profitable demand, accounting for rate, ancillary spend, constraints, and timing.

The 120-room group displaces high-rated transient on Fri/Sat.; Accept Sun–Tue pattern to minimize displacement.; Include banquet revenue in displacement analysis.

Dynamic Pricing

Automated or rules-based rate adjustments responding to demand, supply, competitor pricing, and business objectives.

RMS recommended +$15 due to surge in search demand.; Tighten fences as demand lifts.; Deploy dynamic member discounts by day of week.

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)

Profitability measure approximating operating cash flow before non-operating and non-cash items; key for valuation and debt covenants.

Target 34% EBITDA margin.; Renovation expected to add $1M to EBITDA.; Debt covenant requires minimum EBITDA coverage.

FF&E (Furniture, Fixtures, and Equipment)

Movable assets and in-room/operational equipment; often funded via a 3–5% revenue reserve and planned through PIPs.

Replace casegoods in 2025 FF&E cycle.; Upgrade gym equipment from FF&E reserve.; Brand audit triggered an FF&E refresh.

FIT (Free Independent Traveler)

Individual leisure traveler not attached to a group; often books via OTA or direct and is yield-managed.

Weekend FIT mixes well with corporate midweek.; Target FIT with staycation offers.; FIT ALOS increases during summer holidays.

GDS (Global Distribution System)

Network (e.g., Amadeus, Sabre) used by travel agencies/TMCs to shop and book hotels; relies on accurate content, parity, and negotiated rates.

Load the corporate rate to all GDS chains.; GDS production grew 12% with new TMC deal.; Fix room descriptions for GDS display.

GOPPAR (Gross Operating Profit per Available Room)

GOP divided by available rooms; a profit-based productivity metric incorporating both revenue and controllable operating costs.

Shift focus from RevPAR to GOPPAR optimization.; Upselling boosted GOPPAR despite flat occupancy.; Measure GOPPAR by segment after cost allocations.

Group Attrition

Shortfall between contracted and actual pickup relative to an allowable threshold; may incur liquidated damages per contract.

Contract allows 20% attrition up to cut-off.; Bill attrition on unpicked room nights.; Monitor pace to avoid attrition penalties.

LOS (Length of Stay)

Nights stayed per reservation; managed with minimum/maximum restrictions and used to smooth occupancy and reduce arrival/departure gaps.

Apply a 3-night min LOS over holiday.; LOS restrictions improved shoulder occupancy.; Review LOS by segment for forecast accuracy.

Loyalty Program

Brand scheme offering points, status, and member rates to stimulate repeat business and direct bookings; carries cost and redemption dynamics.

Member rate lifted direct share by 6 pts.; Account for loyalty redemptions in NRevPAR.; Target elites with late checkout benefits.

Metasearch

Price-comparison platforms (e.g., Google, TripAdvisor, Kayak) that route traffic to booking sites on CPC/CPA models.

Increase metasearch bids for mobile users.; Feed rates via the CRS for real-time metasearch prices.; Track ROAS on metasearch vs OTAs.

MICE (Meetings, Incentives, Conferences, and Exhibitions)

Group segment encompassing meetings and events, typically with longer lead times and ancillary spend in F&B and venue rental.

Q3 MICE pace is up 15%.; Secure citywide overflow MICE blocks.; Customize proposals for tech MICE accounts.

No-show

A booked guest who fails to arrive without canceling; managed via policies and fees and factored into overbooking strategy.

Apply one-night no-show fee per policy.; Historic no-show rate is 3% midweek.; Reduce overbooking on storm risk due to lower no-shows.

NRevPAR (Net Revenue per Available Room)

Rooms revenue per available room after subtracting acquisition and transaction costs (commissions, fees); reflects true yield by channel mix.

Direct has higher NRevPAR than OTA.; Optimize NRevPAR, not just RevPAR.; CPA metasearch deal improved NRevPAR.

Occupancy Rate

Rooms sold divided by rooms available for a period; a fundamental demand KPI influencing staffing and pricing.

Occupancy hit 89% during the concert.; Balance occupancy and ADR to grow RevPAR.; Forecast 75% occupancy for shoulder season.

OTA (Online Travel Agency)

Intermediary websites/apps selling hotel rooms for commission under agency or merchant models; important for reach but add acquisition cost.

Shift share from OTA to direct with parity and perks.; Negotiate lower commission tiers with the OTA.; Close OTAs on compression nights.

OTB (On the Books)

Existing reservations and revenue already booked for future dates; a key input to forecasts and displacement analysis.

OTB for July is pacing 12% ahead.; Review OTB daily to adjust rates.; Group OTB is strong; restrict discounts.

Overbooking

Accepting more reservations than rooms available to offset cancellations and no-shows; requires careful modeling to minimize walks.

Overbook by 3 rooms midweek based on history.; Reduce overbooking on nights with high VIP arrivals.; RMS lowered the overbooking limit due to storms.

Pickup

Incremental bookings added to a date or period since the last measurement; used to track pace and adjust pricing.

Yesterday’s pickup was 22 rooms for Saturday.; Group pickup slowed after cut-off.; Strong pickup triggered a $10 rate increase.

PIP (Property Improvement Plan)

Brand-mandated renovation scope and timeline, often at reflagging or sale; aligns property with current brand standards.

Complete lobby PIP by Q4.; CapEx reserved for guestroom PIP items.; Brand approved PIP waiver on bathrooms.

PMS (Property Management System)

Core hotel system managing reservations, check-in/out, folios, room statuses, and integrations with CRS, RMS, POS, and door locks.

Post charges to folio via PMS-POS interface.; PMS outage delayed check-ins.; Automate mobile check-in through the PMS.

Rack Rate

Published full price for a room type without discounts; a reference point for negotiated, promotional, and packaged rates.

Set corporate rate as a % off rack.; Rack rate rarely sells during low demand.; Update rack rates post-renovation.

Rate Code

Alphanumeric identifier for a specific rate plan, tying pricing, conditions, inclusions, and segment for sales and reporting.

Load AAA rate under code AAA10.; Audit inactive rate codes in the PMS.; Map GDS codes to property rate codes.

Rate Fence

Conditions that restrict eligibility for a rate (e.g., advance purchase, nonrefundable, member-only, LOS); used to segment willingness to pay.

Add a 14-day fence to protect peak dates.; Member-only fence reduced OTA leakage.; Nonrefundable fence increased conversion.

Rate Parity

Consistent pricing for the same room and conditions across channels, often required by contracts; helps avoid channel conflict and guest confusion.

Fix parity violations spotted on metasearch.; Close discounts on OTAs to maintain parity.; Use channel manager to enforce parity rules.

RFP (Request for Proposal)

Process by which corporations/TMCs solicit, evaluate, and negotiate annual hotel rates and amenities; often managed through GDS tools.

Submit RFP responses by Friday.; Offer last-room availability in the RFP.; Analyze RFP bid with displacement and NRevPAR.

RGI (Revenue Generation Index)

RevPAR index versus the competitive set (also called RevPAR Index/RPI), where 100 equals fair share; measures market share.

RGI rose from 98 to 104 post-renovation.; Target RGI of 110 on weekends.; RGI slipped as comp set pushed rates.

RMS (Revenue Management System)

Decision-support software that forecasts demand and recommends prices, restrictions, and overbooking limits to maximize revenue/profit.

RMS suggests closing AP on peak dates.; Trust but verify RMS rate lifts.; Tune RMS to optimize for GOPPAR, not just RevPAR.

RevPAR (Revenue per Available Room)

Rooms revenue divided by rooms available (or ADR × occupancy); the core topline productivity metric blending price and volume.

RevPAR up 7% despite flat occupancy.; Drive RevPAR via mix shift to premium room types.; Aim for RevPAR index above 110.

Segmentation (Market)

Classification of demand into meaningful groups (e.g., transient retail, corporate, group, OTA, wholesale) for pricing, forecasting, and reporting.

Refine segmentation to separate BAR and member rates.; Group mix lifted F&B revenue.; Report NRevPAR by segment monthly.

Soft Brand

A collection brand that offers distribution, loyalty, and standards support while allowing property individuality and design freedom.

Convert to a soft brand to tap loyalty demand.; Soft brand requires lighter PIP than a hard brand.; ADR premium expected under soft branding.

STR Report

Industry benchmarking report (from STR) comparing a property to its comp set on occupancy, ADR, RevPAR, and indices.

STR shows we outperformed comp set on ADR.; Investigate occupancy index drop on weekdays.; Align pricing after reviewing latest STR trends.

TRevPAR (Total Revenue per Available Room)

Total hotel revenue (rooms, F&B, ancillary) divided by available rooms; expands focus beyond rooms to overall topline productivity.

Spa packages boosted TRevPAR.; Measure TRevPAR by channel to capture ancillary spend.; Shift mix to MICE to lift TRevPAR midweek.

Upselling

Encouraging guests to purchase higher-priced room types or add-ons pre-arrival or at check-in to increase revenue per stay.

Offer paid upgrades via pre-arrival email.; Front desk upsold five suites tonight.; Bundle parking and breakfast as an upsell.

Walk

To relocate a confirmed guest to another hotel due to an oversell; usually includes compensation, transport, and future stay consideration.

Walk low-rate OTA guests first per policy.; GM approved walk compensation of one night.; Minimize walks by tightening overbooking on storms.