Glossary

Hotel Revenue Management Glossary

Short, clear definitions of the terms used most often in hotel revenue management. If you've come across a term and want to know what it means, you're in the right place.

RevPARRevenue Per Available Room

Revenue per available room. Total room revenue divided by the total number of rooms, whether sold or not. Because it combines both price and occupancy performance in a single metric, it is the most fundamental measure in revenue management.→Related service: Performance Reporting and KPI Analysis

ADRAverage Daily Rate

Average daily room rate. Revenue from sold rooms divided by the number of rooms sold. It reflects the hotel's pricing performance.→Related service: Performance Reporting and KPI Analysis

OccupancyDoluluk

The ratio of rooms sold to total rooms, as a percentage. It's the most basic indicator of demand and inventory use, but on its own it doesn't tell the whole revenue story.→Related service: Performance Reporting and KPI Analysis

GOPPARGross Operating Profit Per Available Room

Gross operating profit per available room. Unlike RevPAR, it accounts for costs, so it reflects the hotel's true profitability better than RevPAR does.→Related service: Profitability Optimisation

TRevPARTotal Revenue Per Available Room

Total revenue per available room. It covers not just rooms but all revenue sources — food and beverage, spa, events. It measures the hotel's overall revenue performance.→Related service: Profitability Optimisation

BARBest Available Rate

The best available rate. The lowest unconditional public room rate a hotel offers for a given date. It's the reference point of the pricing structure.→Related service: Dynamic Pricing

OTAOnline Travel Agency

Online travel agency. Platforms like Booking.com and Expedia that sell hotel rooms for a commission. They provide high visibility but carry a commission cost.→Related service: E-Commerce and Distribution Management

PMSProperty Management System

Property management system. The core software that runs operational processes — reservations, check-in/out, room status and billing. All of the hotel's commercial data passes through it.→Related service: PMS Integrations

RMSRevenue Management System

Revenue management system. Software that forecasts demand and produces price recommendations, automating dynamic pricing. Where the PMS is operational, the RMS focuses on commercial optimisation.→Related service: Dynamic Pricing

Channel ManagerKanal Yöneticisi

The system that distributes a hotel's rates and availability to all OTAs and sales channels simultaneously. It keeps channels consistent and removes the burden of manual updates.→Related service: E-Commerce and Distribution Management

Rate ParityFiyat Paritesi

The principle of offering the same room at the same price across all sales channels. Price inconsistency across channels damages both OTA relationships and guest trust.→Related service: E-Commerce and Distribution Management

Direct BookingDoğrudan Rezervasyon

A reservation made through the hotel's own website or channels rather than an OTA. Because it carries no commission, it contributes directly to net profitability.→Related service: E-Commerce and Distribution Management

Upsell / Cross-sellÜst Satış / Çapraz Satış

Offering the guest a higher room category (upsell) or an additional service (cross-sell). It's one of the most practical ways to grow revenue per room from the same booking.→Related service: Growing Room Revenue

Booking PacePickup

Tracking how quickly reservations come in over time for a given date. Compared against previous years, it guides pricing and inventory decisions.→Related service: Dynamic Pricing

ForecastTahmin

A projection of occupancy, ADR and revenue for a future period. It forms the basis of budgeting, pricing strategy and operational planning.→Related service: Dynamic Pricing

OverbookingFazla Rezervasyon

Accepting slightly more reservations than there are rooms, to offset cancellations and no-shows. Managed well it protects revenue; managed badly it creates guest problems.→Related service: Revenue Management

Length of StayLOS

How many nights a guest stays. Minimum/maximum stay restrictions are tools used to optimise revenue during high-demand periods.→Related service: Dynamic Pricing

SegmentSegment

Grouping guests by booking type, channel or purpose (corporate, individual, group, OTA, etc.). Revenue strategy is built segment by segment; each has its own price and profitability.→Related service: Revenue Management

Feasibility StudyFeasibility

A study that measures whether a hotel investment stands up financially before the money is committed. It brings market and location analysis, occupancy and ADR projections, a revenue-cost model and the return calculation together in one document.→Related service: Hotel Feasibility and Investment Analysis

Comp SetCompetitive Set

The group of hotels a property competes with for the same guest. Selected on price band, location and segment proximity rather than star rating. Every performance comparison depends on this set being built correctly.→Related service: Hotel Feasibility and Investment Analysis

MPIMarket Penetration Index

The ratio of a hotel's occupancy to its competitive set's occupancy. Above 100 means the hotel is taking more than its fair share of the set.→Related service: Performance Reporting and KPI Analysis

ARIAverage Rate Index

The ratio of a hotel's ADR to its competitive set's ADR; it shows the property's price positioning in a single figure.→Related service: Performance Reporting and KPI Analysis

RGIRevPAR Generation Index

The ratio of a hotel's RevPAR to its competitive set's RevPAR. It combines MPI and ARI: above 100 means the hotel is capturing more revenue share than its fair share of the set.→Related service: Performance Reporting and KPI Analysis

GOPGross Operating Profit

What remains after departmental costs and undistributed operating expenses are deducted from total revenue; it sits before rent, interest, depreciation and tax.→Related service: Profitability Optimisation

EBITDAEarnings Before Interest, Tax, Depreciation and Amortisation

In a hotel, the line reached after fixed charges such as rent, insurance, property tax and management fees are deducted from GOP. It shows the cash-generating capacity of the operation and is used in investment valuation.→Related service: Profitability Optimisation

USALIUniform System of Accounts for the Lodging Industry

The system that standardises departmental reporting of hotel revenue and expenses. It makes different properties and different periods comparable; feasibility projections are built on the same structure.→Related service: Profitability Optimisation

CapExCapital Expenditure

Spending that affects the value and future earning capacity of the property — room refurbishment, equipment replacement, structural works. Reported separately from operating expenses.→Related service: Hotel Feasibility and Investment Analysis

FF&EFurniture, Fixtures & Equipment

One of the largest non-construction items in a hotel investment budget, covering the fit-out of rooms, lobby, restaurant and kitchen.→Related service: Hotel Feasibility and Investment Analysis

Ramp-upStabilisation Period

The period a newly opened or repositioned property needs before reaching its target occupancy and rate. Leave it out of a projection and the cash gap of the early years stays invisible.→Related service: Hotel Feasibility and Investment Analysis

ROIReturn on Investment

The ratio of annual net operating profit to total investment. In a hotel, total investment covers land, construction, FF&E, pre-opening costs and working capital together.→Related service: Hotel Feasibility and Investment Analysis

Payback PeriodPayback

How many years the total investment takes to be recovered from annual net cash flow. Easy to read, but it does not account for the time value of money.→Related service: Hotel Feasibility and Investment Analysis

IRRInternal Rate of Return

Reduces the cash flow an investment produces to a single rate of return while accounting for the time value of money; it exposes the timing differences payback cannot see.→Related service: Hotel Feasibility and Investment Analysis

Yield ManagementYield

The method of maximising total return from a fixed, perishable inventory by selling it at different rates according to demand. It is the older ancestor of revenue management, focused on the rate and inventory side.→Related service: Revenue Management

PickupBooking Pickup

The room nights added for a given stay date since the last reading. It shows how fast demand is arriving for each date; negative pickup means cancellations.→Related service: Performance Reporting and KPI Analysis

OTBOn the Books

Total room nights sold to date for a given date. It is the starting point of a forecast: what gets estimated is what will be added on top of it before arrival.→Related service: Revenue Management

Lead TimeBooking Window

The number of days between the booking date and the stay date. A shortening lead time shows demand moving to the last minute and directly shapes the rate strategy.→Related service: Dynamic Pricing

DisplacementDisplacement Cost

When a group or contracted demand takes the place of higher-value demand that could have been sold on the same dates. The real cost of a group quote is this displacement, not the price of an empty room.→Related service: Revenue Management

Rate FenceFence

The condition required to reach a lower rate: booking early, a non-refundable tariff, a longer stay or membership. It stops guests willing to pay more from sliding into the cheapest rate.→Related service: Dynamic Pricing

Rate ShoppingCompetitor Rate Tracking

Monitoring the rates of hotels in the comp set regularly. It confirms position rather than making the decision; used alone, it lets a competitor's occupancy problem set your rate.→Related service: Dynamic Pricing

MLOSMinimum Length of Stay

The minimum number of nights required to book on a given date. It stops single-night bookings fragmenting inventory on high-demand dates.→Related service: Dynamic Pricing

Closed to ArrivalCTA

Closing new arrivals on a given date while stays already in progress continue unaffected. Used to stop the nights around a busy day from being left empty.→Related service: Dynamic Pricing

Stop SaleClose Out

Closing sales entirely for a date, room type or channel. It is the bluntest inventory tool; used often, it lowers the hotel's standing as a supplier in the channel's eyes.→Related service: E-Commerce and Distribution Management

AllotmentAllocation

Rooms set aside in advance for an agency or channel. Fixed allotments can close sales in one channel while rooms remain in another, which is why most hotels prefer selling from a single pool.→Related service: E-Commerce and Distribution Management

No-showFailed Arrival

A guest with a booking who never arrives. The rate of no-shows lets the overbooking limit and cancellation terms be set by measurement rather than guesswork.→Related service: Revenue Management

Walk-inUnbooked Arrival

A guest arriving without a reservation. The rate quoted is usually the highest of the day; remaining inventory and the lateness of the hour decide it.→Related service: Dynamic Pricing

Booking EngineIBE

The software that takes bookings on the hotel's own website. It largely determines the conversion rate of direct sales; the number of steps and mobile performance feed straight into revenue.→Related service: E-Commerce and Distribution Management

MetasearchComparison Platforms

Platforms that display a hotel's rates across different channels side by side. Not appearing there with your own rate means handing the guest, at the moment of decision, to a commissioned channel.→Related service: E-Commerce and Distribution Management

Cost of DistributionDistribution Cost

All channel costs as a proportion of room revenue: commission, channel fees, payment costs and the advertising behind direct sales. It shows in one number what the hotel truly pays to sell.→Related service: Profitability Optimisation

Member RateClosed Rate

A rate shown to registered guests rather than the public. Because it makes the same room a different product, it is the common way to give direct sales an advantage without breaking rate parity.→Related service: E-Commerce and Distribution Management

Billboard EffectBillboard

A hotel's presence on an OTA lifting bookings that do not arrive through that channel. A guest may see the property there and book on the hotel's own site, which is why an OTA's value is not measured by its bookings alone.→Related service: E-Commerce and Distribution Management

CPORCost Per Occupied Room

Total rooms department cost divided by rooms sold. It shows where the floor rate sits; every booking below it loses money.→Related service: Profitability Optimisation

Flow-throughConversion to Profit

How much of an increase in revenue converts into gross operating profit. If the ratio falls while revenue rises, growth is producing its own cost.→Related service: Profitability Optimisation

Review ScoreGuest Rating

The average of the scores guests leave across channels. More than a satisfaction measure, it directly affects conversion, channel ranking and the hotel's power to ask for its rate.→Related service: Integrating Guest Experience With Revenue Strategy

Night AuditDay Close

The process by which the PMS closes the day and reconciles room revenue and accounts. Most reporting rests on the data produced at this close.→Related service: PMS Integrations