Hospitality revenue terminology and core metrics, explained.
A clear reference guide for hotel owners, general managers, and revenue leaders to master pricing models, distribution channels, and performance formulas.
Essential Industry Terms
Built for hospitality decision-makers
Whether evaluating monthly STR reports or configuring RMS rate fences.
Hotel owners & investors
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General managers
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Revenue professionals
Master algorithmic pricing formulas, pick-up pace, and OTA algorithms.
Hotel revenue management glossary
Essential definitions, financial formulas, and technical terminology curated for hotel owners, general managers, and revenue leaders.
Showing 18 of 18 terms
Average Daily Rate
A core hospitality metric measuring the average rental revenue earned per paid occupied room in a given period. It evaluates pricing power without reflecting total room inventory capacity.
Central Reservation System
A computerized reservation system that manages room inventory, guest information, and pricing across all direct and indirect sales channels.
Channel Manager
Software that centrally connects a hotel's Property Management System to various online distribution channels, synchronizing room rates and live availability in real time.
Compset Rate Shopping
The automated intelligence process of tracking, comparing, and analyzing room prices across a hotel's defined competitive set to maintain competitive positioning.
Demand Forecasting
The practice of using historical data, local events, pick-up trends, and market indicators to project future guest room demand and set strategic price tiers.
Direct Booking
Reservations made straight through a hotel's own website, phone, or front desk without third-party intermediary commissions.
Dynamic Pricing
A flexible pricing model where room rates fluctuate continuously based on real-time market demand, remaining lead time, and booking pace.
Gross Operating Profit Per Available Room
A comprehensive profitability metric that measures operational profit against total available rooms, accounting for both revenues and operational expenses.
Length of Stay
The total number of consecutive nights a guest occupies a room during a single booking reservation.
Minimum Length of Stay
A revenue management restriction requiring guests to book a minimum number of nights to secure a room, typically applied during high-demand festival or holiday dates.
Occupancy Rate
The percentage of available rooms occupied by paying guests over a specific period, reflecting property utilization.
Online Travel Agency
Third-party digital marketplaces such as Booking.com, Expedia, and Agoda where travelers search, compare, and book hotel rooms.
Overbooking Strategy
A calculated revenue tactic of accepting more room reservations than physical capacity to offset expected cancellations and no-shows.
Property Management System
The central software used to manage daily hotel operations, including front-desk check-ins, housekeeping, billing, and room assignments.
Rate Parity
The legal or contractual requirement to maintain identical base room prices across all public distribution channels and the hotel's direct website.
Revenue Management System
An algorithmic software application that analyzes real-time market data to recommend optimal daily room rates and inventory controls.
Revenue Per Available Room
The gold-standard hospitality metric combining both pricing power and room occupancy into one actionable figure.
Yield Management
The tactical process of selling the right room to the right guest at the right time for the right price to optimize revenue from perishable inventory.
Need to implement these metrics for your hotel?
Connect with Sunil Singh to audit your property's distribution channels, calibrate dynamic rate tiers, and increase RevPAR.