Hotels glossary

A ¦ B ¦ C ¦ D ¦ E ¦ F ¦ G ¦ H ¦ I ¦ L ¦ M ¦ N ¦ O ¦ P ¦ R ¦ S ¦ U ¦ U ¦ W ¦

A

Availability

The number of rooms at the hotel open for sales for a specific set of dates and / or type of accommodation.

Auction Site

A website, where the price of a product or service is determined by the winning bid.

ATR – Average Treatment Rate

Mainly used for Spa Operations (either independently or within a hotel), it calculates the average rate and it is varied on different treatment packages as well as on the demand / occupancy of the spa booking rate.

Asset Management

The systematic process of developing, operating, maintaining, upgrading, and disposing of assets cost-effectively. An asset is any resource owned by a business.

ARR

Average Room Rate: A hotel KPI which measures the average rate per available room

ARG

Average Rate per Guest: Total room revenue divided by the number of guests.

Apartment Hotel / Aparthotel

A type of hotel that has long-term housing for guests but may still have hotel services like housekeeping and on-site dining. Apartment hotels usually include a full kitchen and one or more bedrooms. Also known as a Residential Hotel or Extended Stay Hotels.

ALOS – Average Length of Stay

The average amount of days guests stay at the hotel during a particular period.

Allotment

Used in the Hotel industry to designate a certain block of pre-negotiated rooms which have been bought out and held by a third party (such as a travel organiser, wholesaler, tour operator, hotel consolidator, travel agent, OTA).

AGOP – Adjusted Gross Operating Profit

The figure that is found by subtracting “hotel base management fees” from the “gross operating profit”.

B

Bid-ask spread

The amount by which the ask price exceeds the bid. This is the difference in price between the highest price a buyer is willing to pay for an asset and the lowest price a seller is willing to sell it.

Bleisure

Bleisure travel refers to the phenomenon of business travellers combining their business trips with leisure outings, often extending their duration of travel.

Boutique

 Properties that have historically been described as unique in style and design-centric, and are either independent or affiliated with a brand system.

C

Central business district

Often referred to as CBD, it is the commercial and business centre of a city.

Chain scales

A method by which branded hotels are grouped based on the actual average room rates.

Contract rooms

Rooms occupied at rates stipulated by contracts – such as for airline crews and permanent guests.

D

Deferred maintenance

The practise of delaying maintenance on a property.

Direct booking

The practise of guests booking that deal directly with a hotel company or property and not a third-party like a GDS or OTA.

Distressed sale

An urgent sale of assets because of negative conditions.

Distribution channel

The different methods with which guests can book stays at a hotel.

Dual-brand hotels

A property that combines two hotels that operate separately but share economies of scale deriving from the sharing of resources such as back-of-house operations.

E

Extended stay

Hotels focus on attracting hotel guests for extended periods of time, typically more than five consecutive nights.

F

FIT

Free and independent travel, or business that is not part of a package or group.

Full-service hotel

Hotels that are generally mid-price, upscale or luxury hotels with a restaurant, lounge facilities and meeting space as well as minimum service levels often including bell service and room service.

Furniture, fixtures, and equipment

Often referred to as FF&E, these are the hard-good items found in a hotel.

G

Global distribution system (GDS)

Centralized reservation systems utilized by several large companies and travel agents to book multiple travel related services, including hotel rooms, airfare, and rental cars.

Group rooms

Rooms that are sold simultaneously in blocks of a minimum of ten rooms or more.

H

Hold period

The timeframe that an investor owns a hotel; in underwriting, owners typically assume a 5-year or 10-year hold period.

HOST Almanac

The HOST (Hotel Operating Statistics) Almanac contains information on hotel revenues and expenses broken down by departments including rooms, food and beverage, marketing, utility costs and maintenance.

I

Index

 Measures a hotel’s performance relative to an aggregated grouping of hotels

L

Location segment

Hotel classifications driven by physical location.

Lose-it rate

The rate of which a hotel would be better off leaving a room unsold than to sell at.

M

Manchised

Hotel properties that are managed and franchised by the same company.

Market class collapsed

Hotels located in the same market and classified in the same chain scale segment as the subject hotel.

MICE

An acronym standing for the meetings, incentives, conferences, and exhibitions (or events) segment of the group travel market.

N

No show

A guest who books a stay at a hotel that does not cheque in or cancel their reservation.

O

OCC (Penetration) Index

An index designed to measure a hotel’s share of the segment’s (comp set, market, tract, etc.) demand (demand = rooms sold).

Occupancy

The percentage of available rooms that were sold during a specified period.

Online travel agency (OTA)

An Internet-based hotel and travel reservations system.

P

Property improvement plan (PIP)

A requirement by hotel brands that owners undertake renovations and upgrades to meet current chain standards.

Property management system (PMS)

A software system that is meant to coordinate various functions at a hotel, including bookings, accounting, point of sale, payroll and sales and marketing, among others.

Prototype

In a hotel context, a prototype refers to a new set of design standards issued by a hotel brand for its properties.

R

Rate parity

A situation in which a travel supplier, such as a hotel, maintains the same price across all its various distribution channels.

Rental by owner (RBO)

Accommodations, which vary from beds in shared rooms to entire homes and buildings, that are owned by individuals and made available to travellers via marketplaces.

Room block, group room block

A set of rooms reserved to accommodate a single group like attendees to a conference, meeting, or event.

Room revenue

Total room revenue generated from the sale or rental of rooms.

RRM – room revenue multiplier

The ratio of value to room revenue.

Rooms available (room supply)

The number of rooms in a hotel or set of hotels multiplied by the number of days in a specified time.

Rooms sold (room demand)

The number of rooms sold in a specified time (excludes complimentary rooms).

Rooms sold (room demand)

The number of rooms sold in a specified time (excludes complimentary rooms).

S

Segmentation

Rooms sold, and revenue data broken down by source of business (transient, group, contract) and source of revenue (room, F&B, other).

Select-service hotel

Rooms-only operations or offer limited services and amenities. Also known as limited-service or focused-service hotels.

SMERF

An acronym for the social, military, educational, religious, and fraternal segment of the group travel market.

Soft brands

Hotels that are affiliated with a major chain distribution but retain unique design, name, and orientation.

Stay-pattern management

A revenue management process that seeks to make optimum use of the hotel’s inventory capacity.

Sustainable tourism

A type of travel that offers unique experiences to the traveller while also protecting nature, culture, communities, history, and the planet.

T

Total revenue

Revenue from all hotel operations, including rooms sold, F&B, parking, laundry, phone, miscellaneous, etc.

Transient rooms

 Include rooms occupied by those with reservations at the rack, corporate, corporate negotiated, package, government, or foreign traveller rates.

U

Upselling

A common sales practise used by hotels to generate more revenue by encouraging guests to purchase additional services on a property or upgrade rooms.

W

Walk-in

Guests who arrive to stay at a hotel without a prior reservation.

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