Glossary | Otamiser

Explore the most relevant hospitality words from A to Z

Adjusted Gross Operating Profit (AGOP)

Adjusted Gross Operating Profit is a financial metric commonly used in the hospitality industry to assess the profitability of a hotel or lodging establishment. AGOP represents the operating profit of the property after adjusting for certain non-operating and non-recurring expenses, allowing for a clearer understanding of the property's operational performance.

ADS (Alternative Distribution System)

ADS refers to the distribution of hospitality listings through third-party websites, such as online travel agencies like Booking.com and Airbnb.

Affinity Groups

A prevalent mode of group travel, such groups could involve familial gatherings, nuptial celebrations, or educational excursions. Participants of an affinity group share a collective interest or objective for their journey. Typically, there is an acknowledged coordinator or a person who assumes the role of the main organizer. Even if not all members are acquainted, each person has a link to the collective. E.g. a wedding travel group where the married couple serves as the group’s coordinators.

Alternative Availability

Alternative availability refers to offering users additional options or alternatives when their initial preferences are unavailable. This may include suggesting alternative accommodations, dates, or services in case their preferred choices are not currently accessible.

Amenities

In the hospitality industry, an amenity refers to any feature or service provided by a hotel, resort, or other lodging establishment that enhances the guest experience or provides convenience and comfort during their stay. Amenities can vary widely depending on the type and quality of the establishment but often include things like: soap, towels, swinning pools, fintess centers, spa, room service, housekeeping and much more.

ALOS

ALOS stand for "Average Length of Stay". It refers to the average number of nights that guest stay at a hotel or lodging establishment during a specific period, such as a month or a year. ALOS is calculated by dividing the total number of room nights sold by the total number of reservations or guest.

ADR

In the hospitality industry, ADR stand for "Average Daily Rate". It's a key performance indicator used to measure the average revenue earned for each occupied room in a hotel or other lodging establishment within a specific period, typically a day. ADR is calculated by dividing the total room revenue generated by the total number of rooms sold (occupied) during that period. ADR is an important metric for hoteliers to assess their pricing strategies, revenue management effectivness, and overall financial performance.

B&B (Bed and Breakfast)

B&B" stands for "Bed and Breakfast." A bed and breakfast is a type of lodging establishment that offers overnight accommodation and breakfast to guests.

Bed Tax

"Bed tax" is a colloquial term used to refer to a lodging tax or occupancy tax imposed by local governments on accommodations such as hotels, motels, bed and breakfasts, vacation rentals, and other lodging establishments. This tax is levied on guests who stay overnight and is typically calculated as a percentage of the room rate charged by the lodging property.

Benchmarking

Benchmarking refers to the process of comparing a hotel or lodging establishment's performance metrics, practices, and processes against those of its competitors or industry standards. Benchmarking allows hoteliers to evaluate their own performance, identify areas for improvement, and set goals for achieving higher levels of efficiency, profitability, and guest satisfaction.

BAR (Best Available Rate)

Best Available Rate (BAR) is a pricing strategy commonly used in the hospitality industry to offer guests the most competitive room rate currently available for a specific date and room type. This rate is typically determined by factors such as demand, seasonality, and inventory levels, allowing hotels to maximize revenue while providing guests with the best value. BAR ensures transparency and flexibility for guests while enabling hotels to optimize occupancy and revenue management strategies.

Booking curve

The booking curve is a graphical representation used in revenue management to visualize the pace and pattern of reservations over time leading up to a specific arrival date. It illustrates the relationship between the number of days before arrival and the percentage of rooms booked for that date.

Booking Enging

A booking engine is an online reservation system used by hotels, resorts, and other lodging establishments to enable guests to book accommodations directly through the property's website. It provides a user-friendly interface where guests can check availability, view room rates and descriptions, select dates, and complete their reservation securely. Booking engines streamline the booking process, allowing guests to make instant reservations 24/7, enhancing convenience and accessibility.

CMS (Channel Management System)

A Content Management System (CMS) is software that simplifies website management by allowing users to create, edit, and publish digital content without advanced technical skills. Popular platforms like WordPress and Joomla provide intuitive interfaces for updating text, images, and other elements. CMS streamlines website maintenance, enabling hotels to showcase amenities, promote offers, and engage guests effectively.

Compression

Compression is a scenario where the demand for accommodations surpasses the available supply within a specific market. This situation typically arises during peak travel seasons, major events, or in destinations with limited lodging options. When compression occurs, hotels and resorts experience higher occupancy rates and increased room prices due to the scarcity of available rooms.

Cancellation Rate

The cancellation rate refers to the percentage of reservations that are canceled by guests before their scheduled arrival date. This metric is important for hotels, resorts, and other short-stay establishments to monitor as it directly impacts revenue and operational planning.

Channel Management

The strategic process of distributing hotel inventory across various sales channels to maximize revenue and reach target markets effectively. This involves managing relationships with online travel agencies (OTAs), global distribution systems (GDS), direct booking channels (such as the hotel's website), travel agents, wholesalers, and other distribution partners.

CPOR (Cost per Occupied Room)

Cost per Occupied Room (CPOR) is a key performance metric in the hospitality industry that measures the average cost incurred by a hotel for each room that is occupied by guests during a specific period. CPOR includes various operational expenses such as labor costs, utilities, maintenance, housekeeping supplies, guest amenities, and other overhead costs, divided by the total number of rooms occupied.

Demand forecast

The process of predicting future demand for accommodations, services, and amenities based on historical data, market trends, and other relevant factors. By analyzing past booking patterns, seasonality, economic indicators, and events, hotels and resorts can anticipate fluctuations in demand and adjust their operations, pricing strategies, and marketing efforts accordingly.

Dynamic Pricing

Dynamic pricing is a revenue management strategy that involves adjusting room rates in real-time based on factors such as demand, seasonality, competitor pricing, and booking patterns. By leveraging data analytics and technology, hotels can dynamically optimize pricing to maximize revenue and occupancy levels. Dynamic pricing algorithms analyze market conditions and demand signals to set rates that reflect the perceived value of accommodations at any given time.

Distribution Strategy

This term describes the comprehensive plan devised by hotels and vacation rentals to distribute their inventory across various sales channels effectively. This strategy encompasses both online and offline channels, including direct bookings through the hotel's website, online travel agencies (OTAs), global distribution systems (GDS), travel agents, wholesalers, and other distribution partners.

Direct Bookings

Direct bookings in hospitality refer to reservations made by guests directly through the hotel's official website, mobile app, or reservation center, without involving third-party intermediaries such as online travel agencies (OTAs) or travel agents. Direct bookings offer several benefits to both guests and hotels.

Dynamic Packaging

Dynamic packaging is a personalized booking approach that allows guests to customize their travel experiences by bundling together various components such as accommodations, flights, car rentals, and activities into a single package. This approach enables travelers to create bespoke travel itineraries tailored to their preferences and needs, offering flexibility and convenience.

Early Bird Discount

This discount is a promotional offer extended to guests who book their accommodations in advance of their intended stay. Typically, hotels and vacation rentals incentivize early bookings by offering discounted room rates or special offers to guests who make reservations well ahead of their arrival date.

EBITDAR (Earnings Before Interest, Taxes, Depreciation, Amortization, and Rent)

EBITDAR, an acronym for Earnings Before Interest, Taxes, Depreciation, Amortization, and Rent, is a financial metric used in the hospitality industry to assess a hotel's operational performance and profitability. EBITDAR represents the hotel's earnings before accounting for interest expenses, taxes, depreciation, amortization, and rent payments. It provides a clear picture of the hotel's ability to generate operating income from its core business activities, excluding certain non-operating expenses and financial obligations.

Extranet

An extranet is a secure online platform that facilitates communication and collaboration between hotels or lodging establishments and their external partners, such as travel agencies, tour operators, and distribution channels. It serves as a centralized hub for sharing information, managing reservations, updating inventory, and accessing important operational data.

Experiental Travel

Experiential travel refers to a trend in the hospitality industry focused on providing guests with immersive and authentic experiences that go beyond traditional sightseeing and relaxation. It emphasizes meaningful interactions with local culture, communities, and environments, allowing travelers to engage in hands-on activities, culinary adventures, cultural exchanges, and outdoor exploration.

Fixed Costs

Fixed costs represent expenses that remain constant regardless of changes in occupancy levels or business activity. These costs are incurred by hotels and lodging establishments to maintain essential operations and infrastructure, regardless of whether rooms are occupied or not.

Flagship hotel

A flagship hotel is a prestigious and iconic property within a hotel chain or hospitality group that serves as a flagship or centerpiece of the brand. These hotels often boast distinctive architecture, luxurious amenities, exceptional service, and prime locations in key destinations.

Full Board

Full board accommodation includes a comprehensive lodging package provided by hotels and resorts, where guests enjoy the convenience of having all meals included in the room rate. This inclusive arrangement ensures guests receive breakfast, lunch, and dinner as part of their stay, offering a diverse array of culinary options throughout their visit.

Franchise Agreement

A franchise agreement in the hospitality industry represents a collaborative partnership between a franchisor (the parent company) and a franchisee (the independent operator). This contractual arrangement grants the franchisee the right to operate under the franchisor's brand name, trademarks, and business model in exchange for ongoing fees and compliance with brand standards.

Full Service Hotel

A full-service hotel offers guests the complete hospitality experience, providing a wide range of amenities and services to cater to their needs throughout their stay. Unlike limited-service or select-service hotels, full-service hotels typically feature various on-site facilities such as restaurants, bars, fitness centers, swimming pools, spa services, business centers, and meeting spaces.

Genius Level

"Genius Level" refers to a loyalty program tier offered by Booking.com, which rewards frequent users with benefits such as discounts, free upgrades, and additional services. The more bookings a user makes, the higher their Genius level, unlocking greater perks and rewards.

Group Block

A group block in the hospitality industry signifies a set allocation of accommodations reserved by a hotel or resort for a specific collective gathering or event.

GOPAR (Gross Operating Profit Per Available Room)

GOPPAR, or Gross Operating Profit Per Available Room, is a critical performance metric used in hospitality management to assess the profitability of hotel operations on a per-room basis. Unlike traditional revenue-based metrics like RevPAR (Revenue Per Available Room), GOPPAR takes into account both revenue and operating expenses, providing a more comprehensive view of a hotel's financial performance. By deducting variable and fixed operating costs from total revenue generated by rooms, food and beverage, and other revenue sources, GOPPAR reveals the net profit derived from each available room.

Group Rate

A group rate is a special deal that hotels or resorts offer for bookings involving a group of people traveling together.

Hospitality Management

Hospitality management is a field of study and a profession that involves overseeing the operations of businesses in the hospitality industry, such as hotels, restaurants, resorts, event venues, and tourism organizations. It encompasses a wide range of responsibilities, including managing staff, ensuring customer satisfaction, overseeing facilities and amenities, and optimizing financial performance.

Hotel Asset Management

Hotel asset management involves the strategic oversight of hotel properties to maximize their financial performance and value. Asset managers work on behalf of owners or investors to ensure that hotels are operated efficiently and profitably, while also protecting and enhancing the long-term value of the investment.

Hotel Chains

Hotel chains are groups of hotels that operate under the same brand name and are often owned or managed by the same company. These chains typically offer standardized services, amenities, and branding across their properties, providing a consistent experience for guests regardless of location. Hotel chains may vary in size, ranging from small boutique chains to large multinational corporations with hundreds or even thousands of properties worldwide.

Hotel Revenue Management

Hotel revenue management involves the strategic optimization of pricing, distribution, and inventory to maximize revenue and profitability. It includes a range of techniques and strategies aimed at selling the right room to the right guest at the right price and time.

Hostelligence

Historical electronic booking data reports from Global Distribution Systems (GDS) that include information on rates and length of stay patterns, business sources, for their local competitive sets, and individual subscriber properties.

Hotel Comp Set

A "hotel comp set" (short for "competitive set") is a group of hotels that a specific property identifies as its primary competitors. These hotels typically share similar characteristics such as location, size, services, amenities, and target market. The purpose of defining a comp set is to benchmark performance metrics, such as occupancy rates, average daily rate (ADR), and revenue per available room (RevPAR), allowing a hotel to evaluate its market position and make strategic decisions to improve its competitiveness. For more inforamtion about this subject, go to our blog that talks about how to create a hotel comp set.

Hotel Competitive Analysis

A "hotel competitive analysis" is the process of evaluating the strengths and weaknesses of competing hotels within a specific market. It involves comparing various aspects such as pricing, amenities, services, customer reviews, marketing strategies, and overall performance to identify opportunities for improvement and to develop strategies to gain a competitive edge. For more inforamtion about hotel competitive analysus, go to our blog that talks about how to beat your hospitality competition.

Independent hotel

An independent hotel is a standalone property that operates without affiliation to a larger hotel chain or brand. These hotels function autonomously, with their own distinct brand identity, management style, and marketing strategies. Independent hotels come in various shapes and sizes, including boutique hotels, bed-and-breakfasts, luxury resorts, and historic inns.

Inbound Tourism

Inbound tourism refers to the activity of travelers visiting a country that is not their country of residence. It involves individuals or groups traveling from one country to another for purposes such as leisure, business, education, or visiting friends and relatives.

Incidental Charges

Incidental charges are additional expenses incurred by guests during their stay at a hotel or other lodging establishment, beyond the basic room rate. These charges typically include purchases of goods or services that are not included in the room rate, such as room service, mini-bar items, parking fees, Wi-Fi access, telephone calls, laundry services, spa treatments, and other amenities.

KPI (Key performance indicator)

KPI stands for Key Performance Indicator. It refers to measurable metrics used to evaluate the performance or success of an organization, department, project, or individual. KPIs are specific, quantifiable, and relevant to the goals and objectives of the entity being assessed. They provide valuable insights into performance trends, help track progress towards targets, and inform decision-making processes.

Lead Time

The duration between the time a reservation is made and the actual date of arrival or service delivery. It represents the advance notice or planning window that guests provide before arriving at a hotel or booking a service.

Last Room Availability (LRA)

Last Room Availability (LRA) is a hotel revenue management strategy that ensures a hotel's last available room is always available for sale, even at a premium rate. This strategy is employed to maximize revenue by capitalizing on the urgency of last-minute bookings when demand exceeds supply.

Length of Stay (LOS)

Length of Stay (LOS) refers to the duration of time that a guest stays at a hotel or lodging establishment. It is a key metric used in hotel revenue management and operations to analyze booking patterns, forecast demand, optimize pricing strategies, and manage inventory effectively.

Look-to-book ratio

The look-to-book ratio is a metric used to measure the ratio of the number of searches or page views to the number of actual bookings. It helps assess the effectiveness of your listings and overall booking conversion rates. A higher look-to-book ratio indicates that more inquiries are resulting in bookings, while a lower ratio may suggest areas for improvement in the booking process or marketing strategies.

Listing

A listing on an OTA (Online Travel Agency) refers to a specific accommodation, such as a hotel room, vacation rental, or other lodging option, that is advertised for booking on the OTA's platform. Each listing typically includes detailed information about the accommodation, such as its location, amenities, pricing, availability, photos, and guest reviews.

Minimum Length of Stay (MINLOS)

MINLOS stands for Minimum Length of Stay, a parameter often used in hotel revenue management to set minimum requirements for the number of nights guests must stay to book a particular room or package. This strategy helps hotels optimize their revenue by ensuring that shorter stays are only booked when they align with the hotel's pricing and occupancy goals.

Minimum Acceptable Rate (MAR)

Minimum Acceptable Rate (MAR) is the lowest rate at which a hotel is willing to sell its rooms without compromising profitability or the perceived value of the property. It serves as a benchmark for setting pricing strategies and helps ensure that rooms are not sold below a certain threshold, even during periods of low demand or intense competition.

Markup

A markup is commonly applied to room rates, food and beverage items, spa services, and other amenities offered by hotels and resorts. The markup percentage reflects the desired profit margin and accounts for various expenses such as operating costs, overhead, and desired profit.

Merchant Rate

The business model used by OTAs (Online Travel Agencies) to markup hotel net rates and sell them to the public is commonly known as the merchant model or merchant agreement. Under this model, OTAs negotiate discounted net rates with hotels, typically lower than the hotel's standard retail rates. The OTA then applies a markup or commission to these net rates when selling hotel rooms to consumers through their platform.

Net revenue per available room (NRevPAR)

NRevPAR stands for Net Revenue Per Available Room. It is a performance metric used in the hospitality industry to evaluate the profitability of hotel operations after deducting certain expenses, such as travel agent commissions, transaction fees, and reservation fees, from the total revenue generated by available rooms.

No Show

A "no-show" in the hospitality industry refers to a situation where a guest who has made a reservation fails to arrive and check in at the hotel as expected, without providing any prior notice of cancellation or change to their reservation. No-shows can occur for various reasons, including changes in travel plans, emergencies, or simply forgetting about the reservation.

Net Rate

The net rate shows the income generated by the organization after deducting all related expenses. To calculate Net Revenue for a hotel or resort, add up all expenses such as food and beverage costs, payroll, utilities, maintenance, and taxes. Then, subtract this total from the overall revenue generated from room sales, food and beverage sales, event bookings, and other sources.

Net revenue

Short for Banquet Event Order.

On the books

The hotel reservations that have already been confirmed and recorded for future dates.

Online Travel Agency (OTA)

OTA stands for Online Travel Agency. These are websites or platforms that allow users to book travel-related services such as flights, hotels, rental cars, and activities online. OTAs aggregate inventory from various suppliers, including airlines, hotels, and tour operators, and offer them to consumers in one convenient platform. Examples of OTAs include Booking.com, Expedia, Airbnb, and TripAdvisor.

Out of Order (OOO)

In the hospitality industry, the term "out of order" (OOO) refers to a room status indicating that the room is temporarily unavailable for occupancy due to various reasons such as maintenance, refurbishment, or cleaning that requires more extensive time.

Overbooking

The practice of confirming reservations beyond capacity, either in expectation of cancellations or no-shows, or in error.

Occupancy Rate

Occupancy rate is a key performance indicator used in the hospitality industry to measure the utilization of available rooms or accommodations within a hotel or lodging establishment during a specific period of time. It is expressed as a percentage and calculated by dividing the number of rooms occupied by the total number of available rooms, then multiplying by 100.

Occupancy Rate = (Number of Occupied Rooms / Total Number of Available Rooms) x 100

Pace

PACE refers to the rate at which reservations are made for a future date or event compared to a previous period or to the same period in previous years. It is a crucial metric used by hoteliers and other hospitality professionals to measure booking activity and trends over time.

Pick-Up

"Pick-up" is the number of rooms booked within a certain period, typically observed from a particular point in time until the actual date of stay. It is a useful metric for understanding how booking patterns evolve as the date of arrival approaches. Most common are 1-Day, 3-Day and 7-Day Pick-Up.

Property Management System (PMS)

The process of evaluating your hotel in comparison to its competitors, which can span various aspects such as product, pricing, and service quality.

Price Positioning

Price positioning describes the strategic approach of determining where a product or service stands in the market in terms of its pricing compared to competitors. It involves analyzing various factors such as the perceived value of the offering, target customer preferences, competitive landscape, and overall market conditions to set the optimal price point.

Quick Set

A setup template that minimizes turnover times and workload between events, leading to a discounted rate for the group.

Qualified Rate

A qualified rate is a discounted rate offered to guests who meet specific criteria or qualifications, such as corporate affiliations, memberships, or eligibility for promotional packages.

Ranking Management

Ranking managementrefers to the strategies and practices to improve the visibility and positioning of listings Online Travel Agencies (OTAs) and search engines. This can include optimising listing information, encouraging positive reviews, and using pricing strategies to climb higher in search results and attract more bookings. Otamisr Booster® is the first ranking management solution, pushing listing on top of the OTA's using a machine learning algorithm.

Rate Parity

The strategy to maintain rate consistency across sales channels like OTAs (Online Travel Agencies), usually enforced through contractual agreements between hotel companies and third-party vendors.

Revenue Forecast

A revenue forecast is an estimate of the amount of money a property/company expects to generate over a specific period in the future.

RevPAR (Revenue per Available Room)

Revenue Per Available Room', is a hotel industry metric that provides insight into the number of rooms that are being sold at a hotel and how much revenue is being generated from those bookings.

Revenue Management System (RMS)

A revenue management system (RMS) is a sophisticated software tool used by hotels and other businesses in the hospitality industry to optimize pricing, inventory, and distribution in order to maximize revenue and profitability.

Segmentation Pricing

The strategy of dividing potential customers into different groups based on various characteristics and tailoring pricing models to each segment to maximise revenue. The criteria for segmentation can include factors such as customer demographics, booking behaviour, time of booking, length of stay, and purpose of travel. The objective is to offer different prices to different segments based on their willingness to pay and their specific needs.

Shoulder Day

The days next to peak days. If a Friday and Saturday are forecasted to be sold out, and Sunday is not, then Sunday would be considered a shoulder date.

Short Term Rental (STR)

A short-term rental refers to the temporary rental of a property for a relatively brief period, typically ranging from a few days to a few months. Short-term rentals are popular options for travelers seeking accommodations for vacations, business trips, or other short-term stays. Properties available for short-term rental may include vacation homes, apartments, condos, or rooms within a larger dwelling. Platforms like Airbnb, Vrbo, and Booking.com facilitate the booking and rental of short-term accommodations, offering travelers a wide range of options to suit their preferences and budget.

Stop sell

A restriction feature enabling hotels to halt bookings for a particular rate/room and date on a specific channel, regardless of room availability.

Static Pricing

Static Pricing refers to a pricing strategy where a hotel maintains a fixed selling rate at all times, irrespective of occupancy levels, market trends, and demand in the marketplace. This contrasts with dynamic pricing, where rates fluctuate based on various factors.

Travel Agent

A travel agent is a professional who assists individuals, businesses, or groups in planning and booking travel arrangements such as flights, accommodations, transportation, and activities. They provide personalized advice and expertise to clients, helping them navigate the complexities of travel logistics, find the best deals, and ensure a smooth and enjoyable travel experience.

Unconstrained Demand

The forecast of how many rooms could be sold if rooms were unlimited. An unconstrained demand forecast is focused on demand potential. It asks – what is the total number of products your business could sell based solely on market demand, ignoring supply-side capacity constraints?

Upsell

Upselling refers to the sales technique used by businesses to encourage customers to purchase a more expensive or upgraded version of a product or service, or to add additional features or enhancements to their existing purchase. In the context of hospitality, upselling often involves offering guests upgrades to higher room categories, additional amenities, or special services during their stay.

Vacation Rentals

Vacation rentals refer to fully furnished accommodations, such as houses, apartments, villas, or cabins, that are available for short-term rental to travelers looking for temporary lodging during vacations or holidays. These rental properties offer amenities similar to those found in hotels, including bedrooms, bathrooms, kitchens, living areas, and sometimes additional features like private pools or outdoor spaces.

Wholesale Model

Travel wholesalers act as intermediaries between hotels and other travel providers and the end consumer, facilitating the distribution of travel products and packages to various sales channels. They often negotiate favorable rates and terms with suppliers to secure inventory and then package these offerings into attractive deals for resale.

Yield Management

The price optimization aspect of a hospitality revenue management strategy.

Zero Base Budgetting (ZBO)

Zero Base Budgeting, often abbreviated as ZBB, is a budgeting approach where each budget cycle starts from scratch, requiring all expenses to be justified regardless of the previous budget. In the context of hiring employees, ZBB considers the expected occupancy for a specific time period or season. This method is commonly utilized in seasonal hotels or establishments where workers are hired on temporary contracts, especially during peak seasons.

Hospitality Glossary