70 Hospitality Terms Every Hotelier Should Know

A

ABVPOR (Average Booking Value Per Available Room)

Average Booking Value Per Available Room (ABVPOR) measures the average revenue generated per booking for each available room. It's calculated by dividing the total booking value by the number of available rooms.

ADR (Average Daily Rate)

Average Daily Rate (ADR) is the average revenue earned per sold room in a given time period. It is calculated by dividing total room revenue by the number of rooms sold.

AGOP (Adjusted Gross Operating Profit)

Adjusted Gross Operating Profit (AGOP) is a performance metric used by hotels to measure the profitability of their operations. AGOP takes into account both revenue and expenses, providing a more accurate measure of a hotel's financial performance. AGOP is calculated by subtracting all operating expenses, including labor costs, utilities, maintenance, and other costs, from the gross operating profit (GOP).

AI (Artificial Intelligence)

Artificial Intelligence (AI) involves machines simulating human intelligence with the capability to learn and adapt. AI in hospitality enhances guest experiences, streamlines operations, and improves efficiency.

ALOS (Average Length of Stay)

Average Length of Stay (ALOS) measures the average number of nights guests stay at a hotel. It is calculated by dividing total room nights by the number of bookings.

B

B&B (Bed and Breakfast)

Bed and Breakfast (B&B) is a type of accommodation that offers overnight lodging and breakfast in a private home or small inn. B&Bs provide a more intimate and personalized experience compared to traditional hotels.

Back of House (BOH)

Back of House (BOH) includes all operational areas hidden from guests, such as kitchens, storage, and staff offices. It’s where behind-the-scenes work occurs to maintain the hotel’s smooth operation.

BAR (Best Available Rate)

Best Available Rate (BAR) is the lowest unrestricted rate a hotel offers, typically available through direct bookings. BAR helps maintain rate parity across distribution channels and serves as a benchmark for other pricing strategies.

BEO (Banquet Event Order)

A Banquet Event Order (BEO) is a document that outlines the details and requirements of a banquet or event. BEOs are typically prepared by the hotel's banquet or event planning team and serve as a guide for the hotel staff involved in executing the event.

BKG (Booking)

Booking refers to the process of reserving a room or other services at a hotel for a specific period. Bookings can be made directly with the hotel, through travel agents, or online travel agencies (OTAs).

Booking Engine

A Booking Engine is a software tool on a hotel’s website that allows guests to make direct reservations. It shows real-time availability and rates, enabling instant bookings.

Boutique Hotel

A Boutique Hotel is a small, stylish property that provides a unique and personalized guest experience. Known for their intimate atmosphere, attention to detail, and distinctive design, boutique hotels stand out from larger chain hotels by focusing on individualized service.

C

Channel Management

Channel Management involves overseeing the distribution of hotel rooms across various platforms, such as the hotel’s website, OTAs, and GDS. Effective channel management ensures consistent pricing, availability, and maximizes revenue potential.

Channel Manager

A Channel Manager is a software tool that automates the distribution of a hotel’s inventory across different channels. It ensures that all platforms reflect accurate and up-to-date information, reducing manual errors and saving time.

Chatbot

A Chatbot is a computer program designed to simulate human conversation through text or voice interactions. In the hospitality industry, chatbots are increasingly used to provide instant responses to guest inquiries, assist with bookings, and offer personalized recommendations.

CDP (Customer Data Platform)

A Customer Data Platform (CDP) consolidates customer data from various sources, creating a unified view of each guest. CDPs help hotels deliver personalized experiences and targeted marketing by organizing data on guest preferences and behaviors.

Corporate Rate

Corporate Rate refers to a negotiated rate offered by a hotel to corporate clients or business travelers. Corporate rates are typically pre-negotiated between the hotel and the client, offering a discounted rate in exchange for a guaranteed volume of business.

CRM System (Customer Relationship Management System)

A Customer Relationship Management (CRM) System helps hotels manage guest interactions, collect data, and personalize communication. CRM systems enhance the guest experience and drive loyalty by centralizing guest information.

CRS (Central Reservation System)

A Central Reservation System (CRS) manages and distributes a hotel’s room inventory across various channels, ensuring accurate and up-to-date availability. The CRS is vital for managing bookings from the hotel’s website, OTAs, and GDSs.

D

DBL (Double Occupancy)

Double Occupancy (DBL) refers to the practice of accommodating two guests in a room designed for double occupancy. Double occupancy rates are typically based on the assumption that two guests will be sharing the room.

Dynamic Pricing

Dynamic Pricing is a revenue management strategy where room rates are adjusted in real-time based on factors like market demand, competitor pricing, and booking patterns. This approach allows hotels to maximize revenue by offering the right price to the right customer at the right time.

E

Extended Stay

An Extended Stay refers to a type of accommodation designed for guests who need lodging for an extended period, typically longer than a week. These properties offer amenities like fully equipped kitchens, laundry facilities, and spacious living areas, providing a home-like environment. They are particularly popular among business travelers, relocating families, and individuals undergoing long-term medical treatments.

F

F&B (Food and Beverage)

Food and Beverage (F&B) refers to all dining and drinking services offered by a hotel, including restaurants, bars, and room service.

Folio

A Folio is an itemized statement of all charges and payments made by a guest during their stay. It includes room rates, taxes, F&B expenses, and any other services used.

Front of House (FOH)

Front of House (FOH) encompasses all guest-facing areas, including the lobby, reception, and dining venues. FOH is where the guest experience begins and is crucial for first impressions.

Full-Service Hotels

Full-service hotels are properties that offer a wide range of amenities and services to cater to guests' needs. They typically have multiple F&B outlets, meeting and event facilities, recreational amenities, and other services.

G

GDS (Global Distribution System)

A Global Distribution System (GDS) connects travel agents and OTAs with hotel inventory and other travel services. GDS systems allow hotels to reach a global audience and facilitate bookings across multiple platforms.

GM (General Manager)

The General Manager (GM) is responsible for the overall operations of a hotel, including staff management, guest satisfaction, financial performance, and strategic initiatives. The GM sets the tone for the property, working closely with department heads to ensure smooth operations.

GOP (Gross Operating Profit)

Gross Operating Profit (GOP) is a performance metric used by hotels to measure the profitability of their operations. GOP represents the revenue generated after deducting all operating expenses, excluding non-operating items such as interest, taxes, and depreciation.

GOPPAR (Gross Operating Profit Per Available Room)

Gross Operating Profit Per Available Room (GOPPAR) measures a hotel's profitability per available room, considering all revenue streams minus operating expenses.

Group Booking

A Group Booking refers to a reservation made for a large number of guests, typically for a specific purpose or event. Group bookings often involve multiple rooms and require coordination with the hotel's sales and operational teams.

H

Hostel

A Hostel is a budget-friendly accommodation option that offers dormitory-style rooms with shared facilities, such as bathrooms, kitchens, and common areas. Hostels cater to budget-conscious travelers, backpackers, and groups.

Hotel Chain

A Hotel Chain is a group of hotels managed, owned, or franchised by the same company, offering consistent branding, services, and standards across multiple locations.

House Count

House Count refers to the total number of guests staying at a hotel at a specific point in time. House Count provides a snapshot of the hotel's occupancy level and helps monitor guest flow and capacity.

I

Independent Hotel

An Independent Hotel operates without affiliation to a major hotel chain or brand, allowing for a unique identity and operational freedom. These hotels often cater to niche markets, offering distinctive experiences tailored to specific guest preferences.

Inventory

Inventory refers to the total number of rooms a hotel has available for booking. Managing inventory effectively is crucial for maximizing occupancy and revenue.

L

LNR (Local Negotiated Rates)

Local Negotiated Rates (LNR) refer to negotiated rates offered by a hotel to local businesses or organizations. LNR rates are typically pre-negotiated between the hotel and the client, offering a discounted rate in exchange for a guaranteed volume of business.

M

MICE (Meetings, Incentives, Conferences, & Exhibitions)

MICE is an acronym that stands for Meetings, Incentives, Conferences, and Exhibitions. It refers to the segment of the hospitality industry that caters to corporate events, including business meetings, incentive trips, conferences, and trade shows.

MLOS (Minimum Length of Stay)

Minimum Length of Stay (MLOS) is a policy requiring guests to book a room for a certain minimum number of nights during high-demand periods to maximize occupancy and revenue.

N

Night Audit

Night Audit is the nightly process of reconciling and balancing the day’s financial transactions at a hotel. It ensures that all guest charges and payments are accurately recorded, updating the system for the next day’s operations.

NRB (Negotiated Rate Business)

Negotiated Rate Business (NRB) involves corporate clients or groups booking rooms at a pre-negotiated rate, providing consistent business and occupancy for the hotel.

O

Occupancy Rate

Occupancy Rate is the percentage of available rooms that are occupied during a specific period. It is a key indicator of a hotel’s demand and operational success.

OTA (Online Travel Agency)

Online Travel Agencies (OTAs) are platforms that allow travelers to book accommodations and other travel services online. While they offer hotels broad exposure, they often come with high commission fees.

P

Package

A Package is a bundled offering that combines multiple elements, such as accommodation, meals, activities, and other services, into a single price. Packages are often designed to provide added value and convenience for guests, encouraging longer stays and increasing revenue.

PAX

PAX refers to the number of passengers or guests. In hotels, PAX is used to denote the number of guests in a room or attending an event.

Example: When planning a banquet, knowing the PAX helps ensure the right amount of food, seating, and staff are available, optimizing service and guest experience.

PMS (Property Management System)

A Property Management System (PMS) is a software platform used by hotels to manage their day-to-day operations. PMS systems typically include features such as reservations management, guest check-in/check-out, room inventory management, billing, and reporting.

POS (Point of Sale)

A Point of Sale (POS) system manages transactions at hotel outlets like restaurants, bars, and shops. POS systems track orders, process payments, and monitor inventory, contributing to smooth operations.

PPPN (Per Person, Per Night)

Per Person, Per Night (PPPN) is a pricing model used by hotels to calculate rates based on the number of guests staying in a room. PPPN rates are typically used for group bookings, package rates, or when additional guests are sharing a room.

PRPN (Per Room, Per Night)

Per Room, Per Night (PRPN) is a pricing model used by hotels to calculate rates based on the room itself, regardless of the number of guests staying in the room. PRPN rates are typically used for standard room rates or when the number of guests does not affect the cost of providing the room.

Proposal

A Proposal is a formal document prepared by a hotel in response to a request for proposals (RFP) from a potential client or event organizer. Proposals outline the hotel's offerings, pricing, and other details to win the business and secure a contract.

ProPAR (Profit Per Available Room)

Profit Per Available Room (ProPAR) is a performance metric used by hotels to measure the profitability of each available room. ProPAR takes into account both revenue and expenses, providing a more accurate measure of a hotel's financial performance.

R

Rate Fences

Rate Fences are conditions or restrictions hotels use to segment customers and control pricing. Common examples include minimum length of stay (MLOS), advance purchase discounts, or non-refundable rates. Rate fences help protect higher rates and optimize revenue.

Rate Parity

Rate Parity refers to the practice of maintaining consistent rates across all distribution channels, ensuring that the same rate is available to guests regardless of the channel through which they book.

Resort

A Resort is a hotel that offers extensive recreational facilities and activities, typically located in scenic destinations, and designed to provide a complete vacation experience.

RevPAS (Revenue Per Available Square Foot)

Revenue Per Available Square Foot (REVPAS) is a performance metric used by hotels to measure the revenue generated per available square foot of meeting and event space. REVPAS provides insights into the profitability and utilization of the hotel's meeting and event facilities.

RevPAR (Revenue Per Available Room)

Revenue Per Available Room (RevPAR) is a performance metric used by hotels to measure the revenue generated per available room. RevPAR is calculated by multiplying the occupancy rate by the average daily rate (ADR).

RevPOR (Revenue Per Occupied Room)

Revenue Per Occupied Room (RevPOR) measures the revenue generated per occupied room, including all income from room rates, F&B, and other services. It helps hotels assess how effectively they are maximizing revenue per guest.

RFP (Request for Proposals)

A Request for Proposals (RFP) is a formal document issued by a potential client or event organizer to solicit proposals from hotels or other service providers. RFPs outline the client's requirements, expectations, and evaluation criteria.

RMS (Revenue Management System)

A Revenue Management System (RMS) helps hotels optimize pricing and maximize revenue by analyzing data such as market demand and historical trends. RMS systems recommend the best pricing strategies to balance occupancy and rate.

Room Block

A Room Block is a group of rooms reserved for a specific purpose, such as a conference, wedding, or group booking. Room blocks ensure that a sufficient number of rooms are available to accommodate the group's needs.

Room Type

Room Type refers to the different categories or classifications of rooms available at a hotel. Room types are typically differentiated based on factors such as size, amenities, views, and bed configurations.

RPI (RevPAR Index)

RevPAR Index (RPI) is a performance metric used by hotels to measure their revenue per available room (RevPAR) relative to a specific market or competitor set. RPI provides insights into a hotel's market share and performance compared to its competitors.

S

S&C (Sales & Catering)

Sales & Catering (S&C) refers to the department within a hotel that handles sales, event planning, and coordination for meetings, conferences, and other group bookings.

SMERF (Social, Military, Educational, Religious, and Fraternal)

SMERF is an acronym that represents a specific market segment in the hospitality industry. SMERF stands for Social, Military, Educational, Religious, and Fraternal groups.

System of Record

A System of Record is a centralized database or software platform serving as the primary source of truth for a specific data type. In the context of hotels, the Property Management System (PMS) is often considered the system of record for guest information, reservations, and other operational data.

T

TrevPAR (Total Revenue Per Available Room)

Total Revenue Per Available Room (TrevPAR) is a performance metric used by hotels to measure the total revenue generated per available room. TrevPAR provides a comprehensive view of a hotel's revenue performance, considering all revenue streams and occupancy levels.

Turn-down Service

Turn-down Service is a hotel service provided in the evening to prepare the guest room for the night and ensure a comfortable and welcoming environment.

Two-pack Hotels

Two-pack Hotels refer to a concept where two hotels are located within the same building or adjacent buildings, sharing certain facilities and services while maintaining separate identities and operations.

With this comprehensive guide, you now understand the 70 hospitality terms every hotelier should know. These terms are essential for navigating the dynamic world of hospitality, equipping you to excel in the industry and provide exceptional guest experiences.