Hospitality Terms: A Comprehensive List of 50+ Terms and Acronyms

Hospitality Terms: A Comprehensive List of 50+ Terms and Acronyms

Kanha Gupta
Kanha Gupta

Today, our copy will not be the same usual piece – talking about how to adopt the right hospitality technology solutions, how they help you, and how to serve guests better. Instead, we will do something different for a change. We will spend some time looking at some of the hospitality industry terms. Being a part of this industry, you may know some of them. However, there are chances that you may get to know some more today.

So, are you ready?

We will start with the industry itself –

Hospitality: The activity or business of providing services to guests in hotels, restaurants, bars, etc. —usually used before another noun. Please note that we have taken this definition as it is from the Merriam-Webster dictionary.

Hotel: Refers to an establishment that provides lodging and usually meals, entertainment, and various personal services for the public. Please note that we have taken this definition as it is from the Merriam-Webster dictionary.

Now, let’s look AT some of the widely used terms and acronyms –

Average Daily Rate (ADR): It is the measure of the average rate paid per room. You can find this by dividing the total room revenues per day by the number of rooms occupied for any given day.

Adjusted Revenue Per Available Room (ARPAR):  You can divide the variable net revenues of your hotel by the total available rooms to determine ARPAR.

ADR Index: ADR of your hotel/ADR of the competitive set

Average Room Rate (ARR): You can use this to calculate the average room rate from a weekly or monthly standpoint. 

Average Rate per Guest (AGR): This helps calculate the average revenue generated by each guest in your hotel. Just divide your total room revenue by the total number of guests to find out the AGR.

AGR (Agreed): Guest rooms contracted to a group

Average Length Of Stay (ALOS): This is the average number of days guests stay at your hotel during a particular period. You can divide the number of room nights by the number of bookings to calculate the ALOS.

Average Published Rate (APR): You can establish this by averaging all types of rooms throughout the year, irrespective of high or low season.

Best Available Rate (BAR): This is the lowest rate you can offer to your guests on a daily basis.

BEO:  Stands for Banquet Event Order. This is the information provided by the banquet client – summarized in one form.

Back to Back: A series of repeated group departures/arrivals arranged by tour operators. This is done to ensure that your rooms never go unsold/vacant.

Black-out Dates: These are the dates when you don’t intend to negotiate on room rates. This is a common practice observed in high-demand days.

Booking Pace: The speed at which bookings/reservations materialize for a specific arrival date/particular future date. This can be helpful while forecasting.

Booking Window: This refers to the time gap between the booking and the actual guest arrival date.

Booking Engine: Also known as an internet booking engine, it allows room reservations to be done on your hotel website/or on your social media pages.

Bucket Check: A front desk activity via a thorough examination of the guest folio to ensure the accuracy of guest accounts.

Central Reservation System (CRS): Refers to a type of software application to update, maintain, and manage information about your property’s rate and inventory on distribution channels.

Central Reservation Office (CRO): It allows a chain hotel’s reservation agents to receive reservation/booking requests coming via phone, mail, brand website, travel agents, corporate clients, and walk-ins, etc.

Channel Manager: A piece of software that allows you to ensure seamless room distribution on all the connected online sales channels, including OTAs, IBE, GDS, and metasearch engines, while updating your rates, restrictions, availability on all of them in real-time.

Complimentary Ratio: Ratio of rooms offered at no cost to the number of occupied rooms.

Cut-off Date:  This is the date when you plan to release all unconfirmed reservations to the general inventory for sales and mark them as available.

Cost Per Occupied Room (CPOR): It helps you analyze the hotel’s average cost per occupied room. For this, you need to divide the total gross operating profit by the total number of rooms available.

Cost Of Walk (COW): This is the cost you may incur when you have to ‘walk’ the customer to another property due to overbooking or double booking. It would include the cost of accommodation at another property (could be your member property or competition) + the cost of transportation + any other complimentary vouchers.

Continental Plan (CP): Your hotel rate that includes a room with breakfast.

Distressed Inventory: Also referred to as last-minute discounted hotel rooms, used to ensure full occupancy.

Double Booking: It occurs when multiple reservations are made for the same room on the same night at your hotel.

Dynamic Pricing: Also known as real-time pricing instead of static pricing, where you adjust your rates based on demand and other market conditions.

Displacement Analysis: A hotel revenue management practice to determine transient group demand vs. group room demand.

Derived Rates: It allows you to update hotel rates by adding/subtracting a certain amount or percentage from the base rate.

European Plan (EP): A hotel rate that covers only the room.

Early Bird Deal/Discount: This is a discount you offer to your guests who book with you at the beginning of a session.

Fenced Rate: Reservations made under fenced rates offer many benefits to guests. Types of fenced rates are non-refundable reservations, non-cancellable reservations, and advanced purchase reservations.

Full Pattern Length of Stay (FPLOS): Another hotel revenue management terminology indicates if a rate is available for the arrival date and length of stay.

Gross Operating Profit Per Available Room (GOPPAR): Indicates the total revenues minus operating and marketing expenses divided by the number of available rooms.

Global Distribution System (GDS): A computerized network system that allows travel agents to book your hotel rooms for their end-users/customers.

Group Wash: Indicates the difference between a group’s contracted and blocked rooms.

Last Room Value (LRV): This is the highest revenue you can make by selling the last room in your hotel.

Length of Stay (LOS):  The number of nights your hotel’s FIT guests use their rooms.

Maximum Length Of Stay (Max LOS): Refers to the restriction policy that you may apply to limit the availability of rooms by specifying a maximum number of nights a guest can book.

Minimum Length Of Stay (Min LOS): Refers to the restriction policy that you may apply to determine the minimum number of nights a guest must book.

Minimum Acceptable Rate (MAR): This is the lowest rate you can offer to a group.

MICE: Meetings, Incentives, Conference & Exhibitions.

Metasearch Engine: An aggregator that derives your rates and availability from OTAs, your website, and other sales channels and presents the same to their end-users.

Modified American Plan (MAP): Your hotel package rate that covers room, breakfast, and one meal plan.

No-Show: It happens when a guest with a guaranteed reservation neither cancels the booking before the cancellation deadline nor arrives.

Night Audit: This is one of the most important front office activities. Also referred to as the end-of-day process, it collates revenue against various heads and ensures the rollover from one business day to the next day.

Negotiated Rate: This is the minimum possible rate at which you sell your room to your corporate guests. Through this, you can ensure that your corporate guests stay at your property year after year.

Net Rate/Wholesale Rate: This is the amount that goes to your pocket when you sell your rooms via an intermediary.

Occupancy Rate: You can calculate this by dividing the number of rooms sold by the number of rooms available and multiplying by 100.

Occupancy Forecast: An estimate of the number of rooms that you expect to sell on a particular day or period of time.

Overbooking: It happens when the total number of rooms reserved for a certain period exceeds the total number of rooms available for sale in the same period. This is a revenue management strategy to ensure full occupancy.

Online Reputation Management: This is the activity of tracking, managing, and responding to the guest reviews published online – review/booking sites.

OTA: Online Travel Agent/Online Travel Agency

PMS: Stands for Property Management System

Pre-payment Guarantee: In this, you would want your guests to make full payment against their reservations before the arrival date.

Rack Rate/Published Rate: This is the rate you charge for your room before applying any discounts.

Rate Shopper: A tool that can automate the process of rate comparison by keeping an eye on competition pricing, room mapping, and demand forecast.  

Revenue Management: It refers to the strategic room distribution across sales channels and pricing to sell the right room at the right price to the right guest to earn more revenues. You can do this efficiently with a revenue management system

Revenue Per Available Room (RevPAR): You can determine this by multiplying your hotel’s ADR by the occupancy rate. Plus, you can also calculate this by dividing your total room revenue by the total number of available rooms in a specific time period.

Seasonal Rates: An increase or decrease in your rack rate based on the dates, depending on low season, shoulder season, and peak season.

Shoulder Season: This is the time leading up to and after a peak season.

Shoulder Nights: Refers to room nights with less occupancy on/before peak room nights

Smith Travel Research (STR): STR report helps measure and benchmark your hotel performance against your completions across the market.

Total Revenue Per Available Rooms (TrevPAR): You can use this metric to determine the total revenue of your hotel on a per room basis by dividing total revenue with total available room nights.

Unconstrained Demand/True Demand: This is how you estimate the total demand for your hotel while not considering the rate, restriction, and capacity constraints.

Underbooking: This is just the opposite of overbooking. When you fail to sell enough rooms, it happens when more rooms go vacant than they should be.

Yield Management: You may call it a revenue management process wherein you do everything to maximize your hotel’s revenue and profitability.

Zero Out: When a guest makes the full payment and the front desk staff closes the folio.