Hotel industry glossary
Clear, self-contained definitions of the most-used terms in revenue management, marketing and hotel distribution. Built for hotel GMs, revenue managers and consultants.
- ADR
- Average Daily Rate. The average rental rate of an occupied room. Calculated by dividing room revenue by the number of rooms sold.
- RevPAR
- Revenue per Available Room. Revenue per available room. The key hotel performance indicator, calculated as ADR multiplied by occupancy rate.
- TRevPAR
- Total Revenue per Available Room. Total revenue per available room, including F&B, spa and other services. A more complete indicator than the classic RevPAR.
- GOPPAR
- Gross Operating Profit per Available Room. Gross operating profit per available room. Reflects real profitability, not only revenue.
- OTA
- Online Travel Agency. Online travel agencies such as Booking.com, Expedia or Hotels.com. They distribute hotel inventory in exchange for a commission, usually between 15 and 25 percent.
- Rate parity
- Consistency of published rates for the same room and date across all distribution channels. When broken (a disparity), it damages guest trust and the share of direct bookings.
- Disparity
- Difference in price for the same room, same conditions and same date between two channels. Negative disparities (OTA cheaper than the hotel website) are the most damaging.
- Revenue management
- The discipline of optimizing the price-inventory-channel mix to maximize hotel revenue. Combines historical analysis, demand forecasting and pricing rules.
- Channel manager
- Software that distributes hotel inventory and rates in real time to OTAs and metasearch engines. Prevents overbookings and reduces manual upload work.
- PMS
- Property Management System. The hotel management system that centralizes reservations, check-in, billing and operations. The operational heart of the hotel.
- CRS
- Central Reservation System. Central reservation system that unifies inventory and connects it with the booking engine and distribution channels.
- IBE
- Internet Booking Engine. Booking engine integrated in the hotel website where direct bookings are made without paying OTA commission.
- Bid strategy
- Bidding strategy in advertising platforms like Google Ads or Meta. Defines how budget is allocated across keywords, audiences and times of day.
- Hotel ROAS
- Return on Ad Spend. Return on advertising investment. In hospitality it's calculated by dividing campaign-generated revenue by ad spend, ideally based on direct bookings with consumed stays.
- CPA
- Cost Per Acquisition. The cost of acquiring a booking. In hospitality it is usually measured as cost per net direct booking.
- Look-to-book
- Ratio between the number of visits that check availability and the number of completed bookings. Measures the effectiveness of the booking engine and commercial offer.
- Multichannel attribution
- Model that distributes credit for a booking across the different channels and touchpoints that played a role in the guest's decision, from first click to last.
- Last-click
- Attribution model that assigns 100 percent of the credit to the last channel that generated the booking. Simple but undervalues discovery channels.
- Google Hotel Ads
- Google's hotel advertising system in its metasearch product, where the hotel competes to appear next to OTAs in the rate carousel.
- Metasearch
- Hotel rate comparison engines like Google Hotel Ads, Trivago or Kayak. They show prices from several distributors for the same room and date.
- Pickup
- Net change in rooms booked for a future date, measured between two time cuts. Key indicator to evaluate booking pace.
- Forecast
- Demand and occupancy prediction for a future horizon. AI improves the accuracy of classic forecasts by adding external signals like events, weather and search trends.
- Lead time
- Time between the booking date and the check-in date. Its analysis is key to defining cancellation policies and last-minute campaigns.
- MICE
- Meetings, Incentives, Conferences and Exhibitions. Business and events tourism segment. Has very different demand patterns from leisure.
- Yield management
- Origin of revenue management. Maximizes revenue per room by adjusting prices and stay restrictions (minimum nights, blocked arrivals) according to demand.
- Length of stay
- Average stay in nights. Its analysis enables MinLOS or MaxLOS restrictions to protect high-demand days.
- Commissionable
- A booking on which a commission is paid to an intermediary, typically an OTA or agency. Direct bookings are non-commissionable.
- Fenced rate
- Rate with restrictions (non-refundable, prepaid, minimum nights, resident) that allows offering a lower price to a segment without cannibalizing the flexible rate.
- BAR
- Best Available Rate. The best available rate published by the hotel for a specific date. The reference rate on which the rest of the rate plan is built.
- Rate shopper
- Tool that continuously scans competitor rates and the hotel's own rates across channels. Feeds pricing decisions and parity alerts.
- Compset
- Competitive set. Group of hotels defined as direct competitors against which occupancy, ADR and RevPAR are compared.