Hospitality Industry Glossary
Are you a hotel operator looking to decode the jargon, optimize your strategies, and ultimately boost your bottom line? Look no further. This meticulously curated glossary is your passport to fluency in the language of hospitality, with a special emphasis on the terms that drive revenue and operational excellence. Get ready to elevate your game!
Core Operations & General Hotel Terms
- ADR (Average Daily Rate):
- The average rental income earned per occupied room per day. Calculated by dividing total room revenue by the number of rooms sold. Crucial for benchmarking performance.
- Allocation:
- The number of rooms a hotel makes available to a third-party distributor (e.g., OTA, tour operator).
- Amenities:
- Services or items provided to guests for their comfort and convenience (e.g., toiletries, Wi-Fi, pool).
- Back-of-House (BOH):
- Areas of the hotel not accessible to guests, where staff work (e.g., kitchen, laundry, offices).
- Boutique Hotel:
- A small, stylish hotel often characterized by unique design and personalized service.
- Brand Standards:
- Guidelines set by a hotel brand for operations, service, and appearance to ensure consistency.
- Check-in/Check-out:
- The process of guest arrival and departure.
- Concierge:
- A hotel employee who assists guests with various services, such as booking tours, making reservations, or providing local information.
- Complimentary (Comp):
- Services or items provided to guests free of charge.
- Day Use:
- A room occupied for a few hours during the day, not overnight.
- Direct Booking:
- A reservation made directly with the hotel, not through a third party. Often preferred due to lower commission costs.
- Early Check-in/Late Check-out:
- Allowing guests to check in before standard time or check out after standard time.
- Front Desk:
- The main reception area where guests check in, check out, and receive assistance.
- Front-of-House (FOH):
- Areas of the hotel where guests are permitted (e.g., lobby, restaurants, guest rooms).
- Guest Cycle:
- The complete experience a guest has from reservation to departure.
- Guest Folio:
- The detailed bill or account statement showing all charges, payments, and credits for a guest's stay, including room charges, taxes, incidentals, and any adjustments.
- Halal Certification:
- Food and beverage compliance with Islamic dietary laws, essential for Muslim-majority markets in Southeast Asia.
- Housekeeping:
- The department responsible for cleaning and maintaining guest rooms and public areas.
- Lead Tim:
- Advance notice period between booking and arrival dates.
- Maintenance:
- The department responsible for the upkeep and repair of hotel facilities.
- No-Show:
- A guest who made a reservation but did not arrive and did not cancel.
- Occupancy Rate:
- The percentage of available rooms that were sold over a specific period. Calculated by (Number of Rooms Sold / Number of Available Rooms) * 100.
- Overbooking:
- Accepting more reservations than there are available rooms, usually to mitigate the impact of no-shows and cancellations. A delicate balance for revenue managers.
- Rack Rate:
- The official, published full price of a hotel room, before any discounts or promotions.
- RevPAR (Revenue Per Available Room):
- A key performance indicator calculated by multiplying the ADR by the occupancy rate, or by dividing total room revenue by the total number of available rooms. The ultimate measure of a hotel's ability to fill its rooms and maximize revenue.
- Staycation:
- A vacation spent in one's home country or immediate area, rather than traveling abroad.
- Walk-in:
- A guest who arrives at the hotel without a prior reservation.
Revenue Management & Pricing Strategies
- Ancillary Revenue:
- Income generated from non-room sources within the hotel, such as food and beverage, spa services, gift shop sales, parking fees, meeting room rentals, and business center services.
- Best Available Rate (BAR):
- The lowest unrestricted rate available to the public for a given date.
- Booking Curve:
- A graphical representation showing the pace of bookings over time for a specific date or period.
- Cancellation Policy:
- The terms under which a guest can cancel a reservation without penalty.
- Closed to Arrival (CTA):
- A revenue management restriction preventing new arrivals on a specific date, often used to optimize longer stays.
- Closed to Departure (CTD):
- A restriction preventing departures on a specific date.
- Comp Set (Competitive Set):
- A group of hotels that are direct competitors in terms of location, amenities, star rating, and target market. Used for benchmarking performance.
- Contract Rate:
- A negotiated, fixed rate offered to corporate clients, tour operators, or other partners for a specified period.
- Cost of Acquisition (COA):
- The cost incurred to acquire a booking (e.g., commission to OTAs, marketing expenses).
- Cross-Selling:
- Offering additional products or services to a guest (e.g., spa treatment, restaurant reservation).
- Demand Forecasting:
- Predicting future demand for hotel rooms based on historical data, market trends, events, and other factors. The cornerstone of effective revenue management.
- Dynamic Pricing:
- Adjusting room rates in real-time based on demand, supply, competitor pricing, and other market conditions.
- Fenced Rate:
- A rate that comes with specific restrictions (e.g., non-refundable, minimum stay).
- Group Block:
- A set number of rooms reserved for a group (e.g., corporate meeting, wedding).
- Guest Lifetime Value (GLTV):
- A prediction of the net profit attributed to the entire future relationship with a customer. For hotels, this considers not just one stay, but all potential future stays, F&B spend, and ancillary purchases.
- Hurting:
- When a hotel is struggling to achieve its revenue goals, often due to low occupancy or ADR.
- Last Room Value (LRV):
- The optimal price for the last available room, considering factors like potential future bookings and length of stay.
- Length of Stay (LOS):
- The number of nights a guest stays at the hotel.
- LOS Restrictions:
- Minimum or maximum length of stay requirements applied to specific dates or rates.
- Loyalty Program:
- A program designed to reward and retain repeat guests.
- Market Segmentation:
- Dividing the overall market into distinct groups based on characteristics (e.g., corporate, leisure, group).
- Minimum Length of Stay (MinLOS):
- A revenue management restriction requiring a guest to stay a minimum number of nights.
- Maximum Length of Stay (MaxLOS):
- A restriction limiting the maximum number of nights a guest can stay.
- Net Rate:
- A non-commissionable rate, often provided to tour operators or wholesalers.
- Pace Report:
- A report tracking the rate at which bookings are being made for future dates, compared to historical trends.
- Parity:
- Ensuring that a hotel's room rates are consistent across all distribution channels. Important for preventing rate shopping and maintaining brand integrity.
- Pickup:
- The number of rooms booked or picked up by a group from their allocated block.
- Price Elasticity:
- The sensitivity of demand to changes in price.
- Rate Fence -
- Restrictions or conditions attached to discounted rates (such as advance purchase requirements, non-refundable policies, or weekend stays) that prevent rate dilution and maintain pricing integrity.
- Rate Shopper:
- A tool or software used to monitor competitor pricing across various channels.
- Refundable Rate:
- A rate that allows guests to cancel their booking and receive a full or partial refund.
- Revenue Management (RM):
- The strategic process of optimizing pricing and inventory to maximize revenue, by understanding, anticipating, and influencing consumer behavior.
- Revenue Manager:
- The professional responsible for implementing and overseeing revenue management strategies.
- RevPASH (Revenue Per Available Seat Hour):
- A metric used in F&B to measure revenue generation per available seat per hour.
- Shoulder Season:
- The period between peak and off-peak seasons, often characterized by moderate demand and prices.
- Stay Restrictions:
- Rules applied to bookings, such as minimum length of stay or closed to arrival/departure.
- Transient Guests:
- Individual leisure or business travelers, not part of a group booking.
- Upselling:
- Encouraging guests to purchase a higher-priced room type or service.
- Walk-up Rate:
- The rate charged to guests who arrive without a reservation (walk-ins), typically higher than advance booking rates due to the premium for last-minute availability.
- Yield Management:
- A dynamic pricing strategy that optimizes revenue by selling the right product to the right customer at the right time for the right price. Often used interchangeably with Revenue Management.
Distribution & Marketing
- Affiliate Marketing:
- A marketing arrangement where a hotel pays commission to an external website for traffic or sales generated from their referrals.
- B2B (Business-to-Business):
- Sales and marketing efforts directed at other businesses (e.g., corporate accounts, tour operators).
- B2C (Business-to-Consumer):
- Sales and marketing efforts directed at individual consumers.
- Booking Engine:
- The online reservation system on a hotel's website that allows guests to book rooms directly.
- Commission:
- A fee paid to a third party (e.g., OTA, travel agent) for generating a booking.
- Content Management System (CMS):
- Software used to create, manage, and modify digital content for websites.
- Direct Channel:
- Booking channels owned and operated by the hotel (e.g., hotel website, phone reservations).
- Distribution Channels:
- The various avenues through which a hotel sells its rooms (e.g., OTAs, GDS, direct website, travel agents).
- Global Distribution System (GDS):
- A vast computer network used by travel agents worldwide to book flights, hotels, and car rentals.
- Hotel Metasearch Engine:
- A platform that aggregates hotel prices from multiple online travel agencies and direct hotel websites, allowing users to compare rates (e.g., TripAdvisor, Google Hotels).
- Online Travel Agency (OTA):
- A website that allows consumers to book various travel services online, including hotels (e.g., Booking.com, Expedia).
- Pay-Per-Click (PPC):
- An online advertising model where advertisers pay a fee each time their ad is clicked.
- Property Page:
- The dedicated page for a hotel on an OTA or metasearch website.
- Rate Plan:
- A specific pricing structure with associated terms and conditions.
- Search Engine Optimization (SEO):
- The practice of increasing the quantity and quality of traffic to your website through organic search engine results.
- Social Media Marketing (SMM):
- Using social media platforms to promote a hotel and engage with potential guests.
- Third-Party Channel:
- Distribution channels not directly owned by the hotel (e.g., OTAs, GDS).
- Website Conversion Rate:
- The percentage of website visitors who complete a desired action, such as making a booking.
Financial & Performance Metrics
- Average Check:
- The average amount spent per customer in a restaurant or bar.
- EBITDA:
- Earnings Before Interest, Taxes, Depreciation, and Amortization. A measure of a company's operating performance.
- Forecasting:
- Predicting future financial outcomes based on historical data and market trends.
- GOPPAR (Gross Operating Profit Per Available Room):
- A profitability metric that considers total hotel revenue and operating expenses.
- KPI (Key Performance Indicator):
- Measurable values that demonstrate how effectively a hotel is achieving its key business objectives.
- P&L (Profit and Loss Statement):
- A financial statement summarizing revenues, costs, and expenses over a period, indicating net profit or loss.
- RevPACC (Revenue Per Available Customer):
- A metric used in F&B that measures the revenue generated per available customer, considering both covers and spend.
- ROI (Return on Investment):
- A performance measure used to evaluate the efficiency of an investment or compare the efficiency of several different investments.
- Sunk Cost:
- A cost that has already been incurred and cannot be recovered.
Technology & Systems (Core to Hotel Operations)
- Property Management System (PMS):
- Software used by hotels to manage reservations, check-ins/outs, guest profiles, billing, and more.
- Channel Manager:
- Software that allows hotels to manage and distribute their inventory and rates across multiple online travel agencies (OTAs) and other distribution channels from a single platform. Essential for efficiency and preventing overbookings.
- Central Reservation System (CRS):
- A system used to manage room inventory and rates across various distribution channels, linking to the PMS, GDS, and OTAs.
- Revenue Management System (RMS):
- Software that helps hotels optimize pricing and inventory by analyzing data and providing recommendations.
- Self-Check-in Kiosk:
- Automated machines allowing guests to check in and receive room keys without staff assistance.
- Reputation Management System:
- A System that consolidates online reviews, helps you analyse the ‘subjective’ feedback into actionable insights. Some Reputation Management Systems allow you to respond to guest reviews natively.
The Game Changer
- ZUZU:
- Your ultimate partner in hospitality, an all-in-one hotel operating system paired with expert services designed to simplify operations, empower smarter decisions, and significantly boost your revenue.
Mastering these terms is not just about speaking the language; it's about strategizing, optimizing, and ultimately, ensuring your hotel thrives in a competitive landscape. Whether you're a seasoned hotelier or just starting, this glossary is your key to unlocking greater success. Ready to take your hotel's performance to the next level? Explore how ZUZU can turn these concepts into tangible results for your business!
Explore ZUZU's HotelEdge Solution