Hotel Terms Glossary

Hotel terms and acronyms can be confusing, especially for employees who are new to the industry. HelloShift hotel industry glossary guarantees smooth daily operations, great guest experiences, and maximized property revenue.

ADR (Average Daily Rate)

The Average Daily Rate (ADR) is a crucial Key Performance Indicator (KPI) for hotels, reflecting the average revenue earned per occupied room each night, calculated by dividing total room revenue by the number of occupied rooms. It's a vital measure for evaluating a hotel's pricing strategy, occupancy levels, and financial health, where a higher ADR suggests the ability to command more for rooms, while a lower ADR might indicate occupancy challenges.

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ALOS (Average Length of Stay)

The Average Length of Stay measures the typical duration guests spend at a property. This metric is essential for understanding guest behavior and managing hotel operations effectively. Longer average stays often indicate guest satisfaction and can reduce operational costs like housekeeping and booking processing. Hotels use ALOS data to tailor services, forecast demand, and allocate resources.

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ARPAR (Adjusted Revenue per Available Room)

Adjusted Revenue per Available Room provides a more nuanced understanding of a hotel's financial performance than traditional metrics. It accounts for both the revenue and costs associated with maintaining available rooms. The measure helps hoteliers assess their operational efficiency, identify areas for cost reduction, and optimize their pricing strategies for maximum profitability.

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ARI (Availability Rate Index)

Availability Rate Index is a critical metric for competitive analysis in the hotel industry. It compares a hotel's room availability against its competitors, offering insights into market positioning and demand. A high ARI suggests better availability relative to competitors, which can be a strategic advantage during peak seasons. Hotels monitor ARI to adjust their inventory strategies, ensuring they capitalize on market opportunities and maintain a competitive edge.

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BAR (Best Available Rate)

Best Available Rate is a dynamic pricing strategy hotels use to offer the lowest possible rate for a room at any given time. This rate fluctuates based on demand, occupancy, and other market factors, ensuring competitiveness and maximizing revenue. BAR is essential for guests seeking the best deals and for hotels aiming to balance occupancy rates with profitable pricing. It also serves as a benchmark for discounts and special offers.

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BEO (Banquet Event Order)

A Banquet Event Order is a comprehensive document that outlines the specifics of events hosted at a hotel, like conferences or weddings. It details every aspect, from room setups to catering requirements, ensuring smooth execution. BEOs are crucial for coordinating between various hotel departments and providing clear instructions to staff. They play a key role in event planning, helping hotels deliver successful events and enhance guest satisfaction.

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CPOR (Cost per Occupied Room)

Cost per Occupied Room is essential for evaluating a hotel's operational efficiency. It calculates the average cost incurred for each occupied room, encompassing expenses like housekeeping, utilities, and amenities. By understanding CPOR, hotels can identify areas where costs can be reduced without compromising guest experience. Effective management of CPOR is crucial for maximizing profitability and maintaining competitive pricing.

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CSAT (Customer Satisfaction Score)

Customer Satisfaction Score is a key performance indicator in the hospitality industry, measuring guests' satisfaction with their hotel experience. This score is usually obtained through post-stay surveys and feedback forms. High CSAT scores indicate satisfied guests, which can lead to repeat visits and positive word-of-mouth. Hotels use CSAT data to improve service quality, address any issues, and enhance overall guest experience.

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Forecast Accuracy

Forecast Accuracy in the hotel industry refers to the precision with which hotels predict future demand, occupancy rates, and revenue. Accurate forecasting is crucial for effective revenue management, allowing hotels to optimize pricing, manage inventory, and allocate resources efficiently. Improved forecast accuracy leads to better decision-making, reduced overbooking, and maximized revenue opportunities.

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GDS (Global Distribution System)

Global Distribution System is vital for hotels to distribute their inventory and rates globally to travel agencies and corporate clients. It acts as a centralized reservation system, connecting hotels with a vast network of travel agents. Utilizing GDS effectively increases a hotel's visibility, broadens its market reach, and drives bookings, especially from business travelers and international guests.

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GOPPAR (Gross Operating Profit Per Available Room)

Gross Operating Profit per Available Room is a key performance indicator used in the hospitality industry to measure a hotel's financial performance. It is calculated by dividing the gross operating profit by the number of available rooms. GOPPAR provides a comprehensive view of a hotel's profitability by taking into account both revenue and expenses. It helps hoteliers assess the overall financial health of their property and make informed decisions to improve profitability.

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LOS (Length of Stay)

Length of Stay is a key metric that represents the average duration of guests' stays at a hotel. It's crucial for revenue management and operational planning. A longer LOS can lead to reduced operational costs and increased guest satisfaction, while a shorter LOS may indicate a need for improved guest services or amenities. Understanding LOS helps hotels optimize room pricing, manage inventory, and tailor guest experiences.

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MPI (Market Penetration Index)

Market Penetration Index is an important benchmark in the hotel industry, measuring a hotel's market share relative to its competitors. It compares the hotel's occupancy rate to the average in the market, providing insights into its competitive position. A high MPI indicates a strong market presence, while a low MPI may suggest areas for improvement in marketing or guest services. Hotels use MPI to evaluate their marketing effectiveness and adjust strategies accordingly.

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NOI (Net Operating Income)

Net Operating Income represents the total income generated by a hotel after deducting operating expenses. This figure is crucial for assessing a hotel's financial health, guiding investment decisions, and evaluating the efficiency of management. NOI is a key metric for investors and hotel owners, reflecting the property's profitability and potential for long-term success.

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NPS (Net Promoter Score)

Net Promoter Score is a widely used metric in the hospitality industry to measure guest loyalty and satisfaction. It's calculated based on guests' likelihood to recommend the hotel to others. A high NPS indicates strong customer loyalty and satisfaction, essential for repeat business and positive word-of-mouth. Hotels use NPS to evaluate their service quality, identify areas for improvement, and strategize on enhancing guest experiences.

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Occupancy Rate

Occupancy Rate is a critical metric for hotels, indicating the percentage of available rooms that are occupied at any given time. It's a key indicator of demand, influencing pricing strategies and revenue management. High occupancy rates suggest strong demand and potential for revenue maximization, while lower rates indicate a need for promotional efforts or market repositioning. Understanding occupancy trends helps hotels optimize their rates and manage inventory effectively.

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OTA (Online Travel Agency)

Online Travel Agency platforms have transformed hotel bookings, offering guests a convenient way to compare prices and book rooms. For hotels, OTAs provide a broader reach to potential customers but often at the cost of higher commission fees. Navigating the relationship with OTAs is crucial for hotels, balancing direct bookings with the extensive exposure these platforms provide.

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Hotel overbooking is a calculated strategy employed by hoteliers to optimize occupancy and increase revenue by selling more rooms than available, anticipating cancellations and no-shows. This approach relies on analyzing historical data, cancellation rates, and demand trends to minimize the risk of guest inconvenience. In instances where demand surpasses availability, hotels prepare by arranging alternative accommodations, offering compensations or perks to affected guests. The success of this strategy hinges on effective communication and exemplary customer service, aiming to maintain guest satisfaction and capitalize on every booking opportunity, turning potential overbooking challenges into a seamless experience for both the hotel and its guests.

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PMS (Property Management System)

Property Management System is an essential software used in hotel management, streamlining various operational aspects from reservations to guest services. A robust PMS integrates different functions like booking, billing, and reporting, improving efficiency and guest experience. By leveraging PMS, hotels can enhance operational accuracy, reduce manual errors, and offer seamless service to guests.

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RevPAC (Revenue per Available Customer)

Revenue per Available Customer is a metric used in the hotel industry to measure the revenue generated from each guest. Unlike room-centric metrics, RevPAC focuses on the overall spending of a guest, including amenities, dining, and other services. This metric helps hotels understand guest spending patterns and identify opportunities to enhance ancillary revenues, which is crucial for comprehensive revenue management strategies.

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RevPAR (Revenue per Available Room)

Revenue per Available Room is a cornerstone metric in hotel revenue management, combining occupancy and average room rates to provide a snapshot of a hotel's financial performance. It's vital for assessing how well a hotel is filling its rooms and at what price. High RevPAR indicates strong demand and effective pricing strategies, while lower RevPAR might signal a need for adjustments in marketing or pricing.

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RevPASH (Revenue per Available Seat Hour)

Revenue per Available Seat Hour is a key metric for hotel restaurants, measuring revenue generated per seat per hour. It's essential for evaluating the efficiency and profitability of a hotel's dining facilities. Understanding RevPASH allows hotel managers to optimize menu pricing, seating arrangements, and operational hours to maximize restaurant revenues and enhance guest dining experiences.

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RevPOR (Revenue per Occupied Room)

Revenue per Occupied Room goes beyond basic room rates, including all revenue generated by an occupied room, such as room service, laundry, and other amenities. This metric provides a more comprehensive view of a guest's value to the hotel. By analyzing RevPOR, hotels can identify successful upselling strategies and areas for potential revenue growth, enhancing overall financial performance.

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RGI (Revenue Generation Index)

The Revenue Generation Index is a valuable metric for hotels to benchmark their revenue performance against competitors or the broader market. It's calculated by dividing a hotel's RevPAR by the market's average RevPAR. An RGI above 1 indicates that a hotel outperforms its competitive set, while an RGI below 1 suggests underperformance. Hotels use RGI to assess their market position and strategize on ways to enhance their competitive edge and revenue generation.

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STR (Smith Travel Research)

Smith Travel Research provides critical market data and benchmarking tools for the hotel industry. STR's reports and analytics are indispensable for understanding market trends, competitor performance, and demand fluctuations. Hotels rely on STR data for informed decision-making, from setting room rates to developing marketing strategies, ensuring they stay aligned with industry dynamics and customer expectations.

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TRevPAR (Total Revenue per Available Room)

Total Revenue per Available Room offers a comprehensive view of a hotel's revenue, encompassing not just room sales but all revenue sources, including dining, spa services, and other amenities. This metric provides a holistic picture of a property's financial performance. By focusing on TRevPAR, hotels can identify opportunities to enhance overall revenue, going beyond traditional room-centric metrics and tapping into all potential income streams.

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Upsell Rate

The Upsell Rate refers to the success rate at which hotel staff can sell upgraded rooms or additional services to guests. Effective upselling strategies contribute significantly to a hotel's revenue, enhancing guest experience with superior services or room features. Tracking the upsell rate helps hotels understand the effectiveness of their sales techniques and staff training, aiming to both increase revenue and improve guest satisfaction.

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Walk-in guests are those who arrive at the hotel without a prior reservation. These guests can be a valuable source of revenue, especially during off-peak times when occupancy rates are lower. Hotels need to manage walk-in guests efficiently, ensuring rooms are available for them without overbooking. Providing excellent service to walk-ins can also lead to positive reviews and repeat business.

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Yield Management

Yield Management is a strategic approach in the hotel industry to maximize revenue. This technique involves adjusting prices based on the expected room demand and optimizing room rates and occupancy levels. It's crucial for hotels to master yield management to capitalize on high-demand periods while filling rooms during slower times. This dynamic pricing strategy is essential for maximizing revenue and ensuring a steady flow of guests.

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Learn Hotel Industry Jargon Today

Understanding the nuances of hotel terminology and industry jargon is essential to stay afloat in the hospitality sector. Even with advanced tools like HelloShift simplifying hotel operations, a comprehensive grasp of key terms remains vital.

Our hotel glossary serves as a bridge, connecting the dots between sophisticated management systems and the fundamental language of the hospitality world. It's a resource that empowers industry professionals - from front desk staff to property owners - with the clarity needed to maximize the benefits of technological solutions.

Embracing both the intricacies of hotel terms explained, and the efficiency of platforms like HelloShift ensures a smooth, guest-focused, and proficient management experience in the dynamic world of accommodation and hospitality.

“ With HelloShift we have seen an almost immediate improvement in the amount and efficiency of communication between all departments. It allows us to complete guest requests very quickly and ensures that the entire staff can keep up with the status of those requests. HelloShift has revolutionized the old school communications log and paper request system. Our hotels will never look back. ”

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