A to Z of Hotel Management

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Do so many acronyms and jargons confuse you? Do you spend your precious time in recalling or looking for what the terms actually mean? It happens to all of us. But, not anymore! 

Here we bring you a handy glossary of commonly used hotel industry terminology and full-form of abbreviations for quick reference – do not forget to bookmark this page.   

Let this A-Z glossary be your guide and dictionary for everything related to hospitality.

If you do not find certain terms but would like to see that included, drop us an email on marketing@erevmax.com.

In case you would like to discuss about your hotel online distribution or revenue management requirements, contact us now for a chat.

Happy Reading!

A

ABR: (Average Bed Rate)

The ratio of total amount charged for beds to the total number of beds sold. This ratio helps to keep a track of and hence, increase the revenue generated per bed.

Access code

Codes determined by individual company advertising a special rate. These codes are used to secure reservations on these predefined rates.

Actual Share            

This refers to the actual percentage of room nights or revenue that a hotel captures during a specified time frame.

Add-on

Features or services added by the user end to the base services or already availing services. It is usually taken to increase the capabilities of a certain program or service. Additional Cost may or may not be associated.

ADR: (Average Daily Rate)  

ADR provides the average rental income earned per occupied room in any given time period. It is one of the most popular financial metric used in the industry and can be calculated by dividing the revenue earned by the number of occupied rooms.

ADS: (Alternative Distribution System) 

Distribution via third party websites like travel search engines, travel portals, online travel agency (OTAs), etc., is called Alternative Distribution System. ADS allow accommodation providers a platform to offer their services to their customers worldwide.

Allocations Management    

In the hospitality industry, allocation is often used when optionally holding a number of rooms for a customer that can be picked up on the basis of specific terms and conditions.

Allotment

Certain numbers of pre-negotiated rooms which are held by third parties like tour operators or OTAs are called Allotments. Allotments can be flexible and managed by Channel Managers.

ALOS: (Average Length Of Stay)

The average number of days guests stay in a hotel is termed as Average Length of Stay. It is calculated by dividing the number of room nights in a hotel by the number of reservations made.

Amenities

The extra product or services provided by the accommodation providers to their guests at no extra cost. This may include shampoos or conditioners provided in the bathroom or free parking, free Wi-Fi, etc.

Ancillary Revenue

Revenue sources other than room and banquet revenue such as parking, Spa, Entertainment, Gold, etc.

APAC: (Asia Pacific)

The Asia and Pacific region.

API: (Application Programming Interface)

An Application Programming Interface allows software applications to exchange data easily and securely simplifying software development and innovation.

Application Service Provider            

This aids in providing computer-based services to customers over a network.

ARI: (Availability and Rates Interface)

A system for transferring a property’s room availability and pricing details between systems, such as a channel manager and booking channels is termed as ARI or availability and Rates Interface.

ARR: (Average Room Rate)

ARR is the average rental income received per occupied room. It is calculated by dividing the total revenue earned by the number of occupied rooms. As it does not incorporate time, it is a less accurate metric than ADR but is still quite important.

Auction Site             

Any site where the price of a product or service is determined by customers bidding against each other is an auction site. Priceline.com is an example of such a site.

Availability

Number of vacancies for a specific type of accommodation for specific set of dates is termed as the availability of the property.

B

BAR: (Best Available Rate)  

Hotels around the world might offer different rates for the same room for different nights depending on demand forecasting. This rate is known as BAR and these rates do not generally impose cancellation charges or other penalties.

B&B: (Bed & Breakfast)

Bed & Breakfast is a type of room rate which include the rates of only the room and breakfast.

BE: (Booking Engine)

An application that supports online reservations, most commonly from the hotel’s own website, is called a booking engine. It is a commission free way for hoteliers to drive direct reservations.

Behavioral Profiling & Targeting      

This process entails the tracking of a user’s path through a website or a network of them and thereafter compiling a profile on the basis of the delivered ads and pages to the user. This information helps in Target Marketing.

Bleisure

Bleisure refers to a trend where business travelers add pleasure travelling to their business trips. The word is a mix of “Business” and “Pleasure”.

Blocked Room         

A room held without any deposit.

Booking Channel

A system on which travellers can search for and book rooms at accommodation providers is called Booking Channel. Also referred to as channel, booking website, online travel agency (OTA), travel website, Booking Channels are distribution channels for accommodation providers to offer their rooms to travellers all around the world.

Booking Summary

A summary provided by the hotel to guests, upon their successful reservation containing guest’s reservation details. A booking summary may contain hotel’s contact details, amount of guests under the reservation, check-in and check-out dates, room type, amounts charged, etc.

Boutique Hotel

A small hotel with unique décor and personalized services can be termed as a boutique hotel.

BRG: (Best Rate Guarantee)

This is the promise that hotels or OTAs will provide the best rates on their own site as compared to any other side for the same product.

Bulk Update

A tool used to update rates or inventories on multiple channels, all at once.

C

Cancellation Policy

A set of policies or rules set down by a hotel to be followed in lieu of cancellation of a booking or reservation of any service.

Channels

Channels are the different platforms through which travelers can book their stay for the trips. These platforms allow hotels to offer their services to guests worldwide.

Channel Management

A method or technique that allows hoteliers to easily update and manage their inventory and rates on all the channels is termed as Channel Management. Channel Management gives freedom to hoteliers from hectic manual updates, reduces labor costs, increases efficiency by providing a single platform to manage and monitor numerous distribution channels.

Channel Manager

Channel Manager is a software or hospitality management solution that provides Channel management. It allows the hoteliers to manage and control the inventory, rates and reservation on all distribution channels on a single dashboard. This helps hoteliers to reduce human error, increase revenue, prevent overbooking and optimize sales.

Closed to Arrival     

A room inventory control function prevents reservations from arriving on that date but the ones who are in the hotel already can stay.

Commissions           

The percentage of the product price paid to an agent or any other distributor in lieu of services rendered.

Competitive Set

The group of competitive hotels within the market / a hotel’s competition.

Consortia   

These are marketing organizations that help small and medium size independent travel agencies to link together in order to leverage purchasing power and marketing opportunities.

Conversion Rate

Conversion rate is the rate at which potential guests are converted into guests. It the ratio of website visitors to paying guests.

Corporate Rate       

This rate is reduced for the guests who are staying for business. Sometimes, these might be specially negotiated terms.

CPOR: (Cost Per Occupied Room)

It is the formula used to calculate the operating cost per room occupied, i.e. whether the operating cost of rooms sold is profitable for the hotel or not.

Formula:  Gross operating profit/ no. of rooms sold

CRM: (Customer Relationship Management)

CRM is the management of the relationship between Hotels and their guests. CRM works effectively towards the re-visits of customers as well as in converting potential guests into paying guests by building a commercial relationship.

CRS: (Central Reservation System)

CRS is the application used to manage hotel room reservations and the hotel’s online distribution. It stores the input data from the hotel and distributes such information of hotels across all online distribution channels which will be used to reach guests to offer their hotels for service. CRS is mainly used by hotel groups and chains as all the properties can be managed and monitor from one single platform.

CTA: (Call To Action)

A piece of content, in the form of a button, with an intention to encourage a viewer or reader to perform a specific action, like filling up a form of an instruction from where there could be conversion or reservation.

D

Dashboard

A dashboard provides the summary of overall performance indicators, key information relating to progress, and user settings all on a single page.

Demand Based Pricing         

This is a revenue management principle that helps with the proper pricing of hotel rates. The rate is set upon the demand within the marketplace and what the market will bear.

Demand Generators            

Specific strategies, programs, offers etc. that are used to drive demand for a particular property or area.

Denial (Turn Away)

This is a specific request that a customer make that the hotel is unable to accommodate for whichever reason.

Destination Marketing        

The practice of promoting a specific city, area, region or state to possible tourists

Direct Connect        

This eliminates the extranet maintenance for rates and availabilities. More often than not, OTA reservations are automatically sent to the hotel via the CRS (or PMS, depending upon the system that is used to directly connect to the OTA).

Direct Sale

Direct sales are sales or revenue generated from selling on Direct Channels which does not charge any commission for such sales, like the hotel’s own website.

Distressed Inventory

Distressed inventory can be termed to those rooms that cannot be expected to be sold at full prices. These rooms generally are sold at a lesser price to attract customers in order to avoid the room going unoccupied. Eg: A room with cancelled reservation close to the booking date.

Distribution Channel (Same as Booking Channel)

A platform on which travellers can search for and book rooms at accommodation providers is called Distribution Channel. Also referred to as channel, booking website, online travel agency (OTA), travel website, Distribution Channels allows accommodation providers to offer their rooms to travellers all around the world.

Distribution Strategy

The strategy of choosing the right channel and the right ways to optimize sales through online distribution channels is called Distribution Strategy.

Dynamic Pricing

Dynamic Pricing is pricing the inventory according to the changing demands in the market. Forecasting the demand and allotting prices accordingly is a key influence on revenue generation.

Dynamic Room Mapping

Dynamic Room Mapping is a feature of a channel manager which allows mapping of multiple channel rates and manage such rates based on a single room rate.

E

Early bird

A promotional strategy where discounted rates are offered to customers booking rooms well in advance.

ED: (Electronic Distribution)             

Encompasses all the electronic channels of distribution, which includes GDS, Online Travel Agencies and Web Booking Engines. These distribution channels can be accessed through the Internet, an intranet or through an interfaced connection.

ETA: (Estimated Time of Arrival)

It is the estimated hour at which the guest is supposed to check-in.

Extended Stay

Extended stay is when a hotel charges for weekly basis when a guest stays for more than five consecutive days.

Extra Guest Rate

The extra charge which a customer needs to pay if the number of guests staying in a room is more than the room occupancy mentioned.

Extranet

A website that gives restricted access to third parties like vendors, suppliers, partners and a set of authorized customers which can be administered externally.

F

Fair Market Share  

Hotel’s individual percentage of the market they should reasonably expect to capture, all things being equal, based upon their competitive set. Calculated by dividing the number of rooms at the hotel by the total number of rooms in the competitive set (inclusive of the subject hotel).

Fenced Rates

Rates a hotel uses to provide a series of options to guests. The rate is determined by which range a guest accepts, which might include non-refundable, non-cancellable reservations and advanced purchase reservations.

Flash Sales 

A promotional sale that is available to the customers of a hotel for a limited time period only.

G

GDPR

Introduced by European Union, the General Data Protection and Regulations lays down the policies to safeguard personal data of individuals in Europe. It aims primarily to give control to individuals over personal data and makes regulatory environment for international business simplified.

GDS

A reservation platform for worldwide travel agents and corporate bookers to make reservations of flights, cars and hotels for their customers is called a GDS or Global Distribution System. There are four major GDS; Amadeus, Sabre Galileo and WorldSpan (the latter two owned by TravelPort).

GOPPAR: (Gross Operating Profit Per Available Room)         

GOPPAR is a key performance indicator in the hotel industry. It can be arrived at by dividing the Gross Operating Profit (GOP) by the number of available rooms. THE GOP is equal to total revenue minus the operating expenses. It demonstrates the profitability of the property as a whole.

Group Rate

A special negotiated rate for large groups such as conventions, trade shows, meetings, tours or incentive groups.

GSA: General Sales Agent

A company or individual contracted by hotel chains for promotion of their chains in countries and cities these hotel chains do not have an office in. In some cases, GSAs can accept reservations on behalf of the hotel chain.

H

HEDNA: (Hotel Electronic Distribution Network Association)

An organization formed in 1991 that consists of hotel marketing automation staff. Its purpose is to  advance communication, procedures and technology for the sale of hotel accommodations through the Global Distribution Systems.

Hotel Chain

A group of hotels under the same brand name and management is called a chain of Hotels or Hotel Chain.

Hotel Management

The field of study and business of a wide range of associated topics on Hotels is termed as Hotel management. It generally helps hotel owners to bring expertise to their hotel for maximum business sales and profits in an organised manner.

I

IATA: (International Air Transport Association)

A Geneva based association of international airlines to establish standard practices. IATA accredits would-be travel agents throughout the world. This certification includes issuance of an ID-code, termed an IATA number. IATA numbers are used as the travel agent identifier in reservations to allow suppliers, including hotels, to pay commissions.

IDS: (Internet Distribution System)

Distribution using the Internet, World Wide Web, Intranets, extranets and on-line services.

Independent hotel

A hotel run by independent owner or management is an independent hotel. It does not have any other properties or hotels using the brand name.

Integration

The synchronisation of data with hotel software in order to enhance the system and provide better customer experience can be termed as Integration.

Inventory

A room available for sale or a hotel has to sell on all online distribution channels is called Inventory. Availability and pricing on online distribution channels are marked against these rooms.

Invoice

The request for final payment confirming the services availed or to be availed is called Invoice.

K

KPI: (Key Performance Indicator)

The quantifiable measure that calculates and indicates the performance and progress of a hotel measured against their strategies. These indicators measure the success of a hotel in meeting their goals and objectives.

L

Lead Time Restriction          

It is a room inventory control function that requires a guest to meet or exceed a specified advance notice in order to complete a booking.

Listing

An advertisement to promote the rooms for a certain period of time is called a listing.

Lookers to Bookers

The conversion of online shoppers to actual buyers; this is often communicated in a ratio.

LOS: (Length of Stay)

Number of nights a guest stays at a hotel or reserves a stay at a hotel is called the length of stay.

Lose-it rate

This is the rate at which the hotel would be better off leaving the room vacant than selling it.

Loyalty Programme

Loyalty programme is a marketing programming through which loyal customers or guests can earn rewards and points for their revisits. This programme allows hotels to retain their old customers and maintain a healthy hotel-guest relationship.

LRA: (Last Room Availability)            

This term is generally used in conjunction with negotiated rates. It allows agents to book the last room a hotel has available at the contracted rate.

M

Master Rate

The rate from which all other rates are derived is called a master rate. Any changes in the master rates reflect on the derived rates.

Meal Plan

Meal Plan is a rate plan for rooms with meals included in the rate. Meal plan may include only breakfast, only breakfast and dinner or all three meals a day.

Meeting Planner    

A person or company that is making reservations on behalf of a group of individuals.

Metasearch Engine

A search tool that enables users to search for accommodation providers or hotels on multiple sites simultaneously in order to compare the best rates and conditions from one location is called a Metasearch Engine.

Metasearch Site      

This type of site compiles the rates from multiple 3rd party websites and displays the result on a single site. The user is transferred to the selected 3rd party site to complete the booking.

N

Negotiated/ Secured Rates

In the hospitality industry, these rates are contracted rates that are not publicly available and which can also be booked via the GDSs, IBEs and call centers. A prerequisite for a secured rate is an access restriction which is controlled through rate access codes and pseudo city codes (PCC) in the GDSs.

Net Rate     

The rate provided to wholesalers or agents that can be marked up for end customers.

Next Generation Seamless GDS Connectivity            

An interface or connection between a CRS system and the four major GDS channels. The term “Next Generation Seamless” is used to illustrate the tight, reliable integration between a CRS and a GDS.

No Show    

Anyone booking a room and not showing up is a no show. However, hotels provide a leeway in most cases depending upon the demand available for the rooms.

O

Occupancy Index    

This is the measure of the hotelier’s property occupancy percentage to its competition’s set. This is an effective measure that needs to be coordinated with the rate index and then subsequently the RevPAR Index.

Occupancy Rate

Occupancy Rate generally measures the success of the hotel. It is the ratio of rooms sold to rooms available. It is important for hotels to keep track of this on a daily basis for optimum revenue management.

Opaque Sites           

An OTA site that offers a certain product category at a certain price, e.g. 4-star hotel rooms at a fixed price. The shopper only sees the category but not the specific hotel or brand name which are disclosed after the purchase.

Option Date             

The deadline by which the deposit has to be paid or the room will no longer be held.

Organic Search Listings        

The sites that appear of search result pages that have not been paid for as a pay per click or pay for position campaign are called organic search listings.

OTA: (Online Travel Agency)

Third party online distribution channels which are visited by travellers to book their entire trip or part of it like car rental, flights, hotels, restaurants, entertainment, etc.

OTA: (Open Travel Alliance)

OTA is a non-profit organisation working to establish a common electronic vocabulary for use in the exchange of travel information.

Overbooking

The practice of selling rooms more than the hotel actually has mostly to account for cancellations and no shows. This is done in order to achieve 100% occupancy and so that no rooms go unoccupied.

P

Package

A collection of services under a single price can be termed as a package. The individual prices of such services summed up may or may not be greater than the package price.

PMS: (Property Management System)

The onsite property activities of a hotel can be controlled from an application called PMS or Property Management System. Onsite property activities may include check-ins, check-outs, guest profile, room status, etc. PMS integrations with other applications can be done by Channel Managers.

R

Rack Rate   

This is the published tariff for a particular hotel. It is the rate that a walk-in customer pays. The standard publicly sold rate plan. (Traditionally the highest priced rate plan)

Rate Distribution

Distributing a hotel’s rate on direct or indirect channels for revenue generation could be termed as rate distribution.

Rate Fences             

These are the terms and conditions that go hand in hand with discounted rates. These fences keep that rate from resulting in lower hotel revenues because all the higher priced customers simply purchase the lower rate.

Rate Parity

All distribution channels connected to a hotel should reflect the same rate for a particular room type. Rate parity encourages guests to book directly with the hotel where terms/policies may be more flexible and strengthens customer loyalty.

Rate Plan

A package deal on which different rooms are sold on different set of prices is called a rate plan. Example: Rate plan for room only, deluxe room, super deluxe room, deluxe room with breakfast, etc. are going to be different.

Rate Shopper

Software that helps hoteliers to know the rates of competitors for a particular type of room and strategies against the hotel’s own rates accordingly is called Rate Shopper.

Rates

The value at which hotels sell their services to guests is called rate. It is also called cost or price.

Representation Company (Distribution Partners)    

Distribution and marketing companies such as: The Leading Hotels of the World, Top International Hotels, Utell or Worldhotels which support the hotels with their international distribution. A uniform market representation under a common GDS chain code is typical for this marketing strategy.

Restriction

A legal condition to keep a control over revenue is called a restriction. A successful revenue management strategy to better control room reservations is termed as restrictions. It is differently applied to different room types for different rates. Example: Smoking and Non-smoking rooms.

RevPAR: (Revenue per Available Room)

Revenue per Available Room is dividing the Average Daily Room Revenue (ADR) by total number of rooms available at the hotel. It helps hotels to benchmark performance based on rates and occupancy level.

RFP: (Request for Proposal)

A request by corporate customers and travel agencies for hotels to submit proposed pricing for the next year.

RMS: (Revenue Management System)

The software solution which allows hoteliers to anticipate, understand and react to guest behaviour in order to optimize revenue is called Revenue Management System. RMS uses data from the market and compares hotel output to help hoteliers take informed decisions.

Room Closure

Room closure is physically closing a room for any reason other than reservation. Room closure removes a room from availability.

Room Night

Rooms occupied times the number of nights each room is reserved for.

S

Sell Through

A function on a hotel CRS (Central Reservation System) that controls room inventory is Sell Through.

It helps guests to book their extended stay without prior notice. It is a valuable option for hotelier to capture the extra revenues from extended stay of guests.

SEO: (Search Engine Optimization)

Search Engine Optimization is a major part of digital marketing. SEO increases traffic flow by increasing visibility of a website or web page on search engines through organic (non-paid) or inorganic (paid) processes.

Single Guest Discount

A discounted rate applied on a room rate pricing for single guest occupancy.

Single Image Inventory       

This means that the distribution should be such that a consumer should find the same rate at the same time for the same accommodation, irrespective of the booking channel being used. Technology enables and supports this strategy.

Soft Opening           

This is the commencement of partial operations (to allow teething problems to be ironed out) before the official opening.

Static Pricing            

The strategy of charging the same price for a room, regardless of the time of the year or the demand in the marketplace.

Stay Pattern Management 

It is an RM process that seeks to make optimum use of the hotel capacity. This is done by studying the stay patterns over a period of time and offering rate differentials, minimum and maximum length of stay etc. basis that.

Stop Sell

A feature of restriction that allows a hotel to put a halt on bookings for a specific room availability/pricing on any individual channel even if there are rooms available to be sold.

Switch Company    

An organisation that provides communication connections, data communication and data reformatting services to link global distribution systems and hotel central reservation systems. 

System of Record   

This system has the core responsibility for the collection and maintenance of a specific type of data or information.

T

Targeting   

The ability to deliver the most appropriate ad to a user, primarily through  content, demographic profiling or browser targeting.

Time Based Pricing

Time based pricing is a pricing method in which hotels charge their guests based on timing. It is a method in which prices depends on what time they are being booked. Higher prices are charged when demand for rooms are high or in peak seasons and less when demand is less.

Travel Agent

A company or an individual who make all arrangements for travelling guests starting from booking flights or trains to hotel stays to renting cars for sightseeing, etc. They connect hotels to their guests.

TRevPAR: (Total Revenue per Available Room)

Total revenue from all departments which the room can generate – including the hotel’s restaurant is called TRevPAR. It is a key performance indicator (KPI) that allows hoteliers to track their progress.

U

Unconstrained Demand Forecast

A sum of potential customers denied and the number of guests booked is called unconstrained demand forecast. It is the number of guests a hotel could provide for or accommodate in the absence of all constraints. 

Upsell

Process in which guests or customer maybe offered additional services or upgrades at a cost is called Upsell.

User Agent

Browser or application directed by the customer to complete a transaction on their behalf.

V

Voice           

Method of taking hotel reservations by telephone (and sometimes all other reservations not taken electronically).

Vouchers   

These are forms or coupons provided to travelers against services indicating that those have been prepaid. These vouchers can then be used to avail of such services as sightseeing, car rentals, meals etc.

W

Walk-in-Rate           

The standard published rate for a room in a hotel or resort before any discounts are applied.

Wholesaler

Develop and market inclusive tours and individual travel programs to the consumer through travel agents. Wholesalers do not sell directly to the public.

Workcation

The words “work” and “vacation” combined gives the word workcation. This is a new trend where vacation combines leisure and business. With more people working from home in the recent times, this trend has become popular where guests work on their vacations staying at hotels.

Y

Yield Management

Strategies that help hotels make optimized revenue from limited inventory by providing the right services to their guests with right marketing at the right time is called Yield Management. It helps hotel track their progress and be on the right track to reach their goals.

Reach out to us for your Hotel Channel Manager, CRS, Rate Shopper, Booking Engine, Website Development or Digital Marketing requirements.

We are happy to have a discussion to see how we can help you achieve your property’s occupancy and revenue goals – Contact Us today

 

 

 

 
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