Hotel Terminology Guide: Key Terms Every Hotelier Should Know

1. ADR (Average Daily Rate) - It is used to calculate the average revenue generated by a room; it is calculated by dividing the total revenue generated from the room by the total number of rooms occupied, over a given period.
2. RevPAR (Revenue Per Available Room) - It refers to revenue generated by the rooms, including occupied and unoccupied rooms. It can be calculated either by multiplying a hotel's average daily room rate by its occupancy rate or by dividing total room revenue by the total number of rooms available in the period being measured.
3. Occupancy Rate - It is the ratio of occupied rooms to the total number of available rooms, at any given time. 
4. Housekeeping - Management and cleaning of a room to ensure hygiene and neatness.
5. Overbooking - When a hotel accepts more reservations than the actual room capacity. 
6. Upselling - A sales technique used for selling upgrades of premium services or amenities by encouraging guests. 
7. Loyalty Program - A reward program designed to encourage and enhance brand loyalty. It is also a marketing strategy that’s designed to attract new guests and retain existing onesby offering special discounts, complimentary amenities and other incentives.
8. Seasonal Pricing - Refers to a pricing strategy which involves adjusting room rates according to the hotel season. 
9. Amenities - Refer to additional services or items provided by hotels and resorts to enhance guest experience.  
10. Check-in - Refers to the arrival of a guest in the hotel. 
11. Check Out - Refers to the departure of a guest from accommodation after settling the bill.  
12. Rack Rate - Refers to the room rate before any discount or coupon. Also, it is called the standard price. 
13. GDS (Global Distribution System) - It is the intermediary between hotels, travel agents & corporates providing them with real-time insights into hotels' inventory. The primary target of GDS is travel professionals and corporate travelers, as they offer a B2B approach.  
14. OTA (Online Travel Agency) - They are third-party agencies allowing guests to book accommodation and/or purchase other services with real-time availability, read reviews and view photos of the hotel. OTA also provides the latest updates, instant confirmation and secure transactions.  
15. Booking Window- A specific period available for guests to make a reservation for their future stays at a given price and/or discount. 
16. Concierge – A staff member who is available to assist guests by offering a wide variety of services such as making reservations, booking tours, securing or availing transportation and many more, to enhance guest experience. 
17. CRS (Central Reservations System) - A system established to centralize,manage and maintain room rates, and real-time availability across various channels to provide updated information. 
18. Room service - It is a hotel service that allows guests to order food, beverages and other items directly to their rooms.
19. Weekend rate - Refers to the rate or discounts offered by the hotels over the weekend. 
20. Weekday Rate - Refers to the rate offered by the hotels during the week.  
21. Unoccupied - Refers to a room that isn’t being used by the guests and is idle for occupancy. 
22. Family room- Refers to a room that is big enough to accommodate a family. 
23. ORM (Online Reputation Management) - A system established to concentrate on your hotels’ online presence by monitoring customer reviews and responding to them. 
24. PMS (Property Management System) - It’s also referred to as Hotel Management System, designed to streamline your hotel operations. It efficiently manages reservations, revenue management, inventory, and payments, and can be integrated with third-party systems. It acts as a foundation of a hotel. In a nutshell, it is a centralized dashboard allowing you to manage everything at one place.
25. Guest Reviews- Valued feedback from guests, sharing their experience during the stay, their reviews on facilities, services, food and others. These reviews provide insights to hoteliers to improve their offerings, and they can thus enhance guest satisfaction. 
26. Guest Complaints – Refers to negative feedback from a guest regarding their experience during their stay. 
27. Front Desk - Also referred to as reception, is a place where guests check in and check out. 
28. Front Desk Software – It is software designed to help hotel owners automate their check-in/check-out process, manage reservations, and conduct transactions securely.
29. Cancellation policy – Refers to a policy established by a hotel that defines the rules, penalties and refund procedures or eligibility. 
30. Guest Experience – It encompasses every aspect of a guest's experience during their stay, their interaction with hotel staff, dining and overall satisfaction. 
31. Gross Operating Profit (GOP) - A metric used to calculate a hotel’s profitability, calculated by subtracting operating expenses from total revenue. 
32. Gross Operating Profit Per Available Room (GOPPAR) - It is a key performance indicator that provides a comprehensive view of revenue and also measures operational efficiency. It is calculated by dividing Gross Operating Profit by Total Available rooms.
33. Average Length of Stay (LOS) - This refers to the average number of nights a guest spends in the hotel during a given period. 
34. Revenue Management – It is a strategy which allows you to maximize revenue by analyzing the data, industry trends, and guest’s behavior to optimize your pricing. It gives you the edge over competitors and enhances customer experience.
35. Customer Relationship Management (CRM) – A system designed to manage and enhance interactions with guests and even potential guests.  
36. Inventory – In hotels, it refers to the total number of rooms available for sale by the hotel. Inventory management is necessary to maximize revenue and avoid situations like overbooking.
37. Customer Retention Rate (CRR) - A metric used to calculate the number of repeat guests a hotel gets. It also shows their efficiency, quality of service and guest experience. It is calculated by dividing the number of repeat guests by total guests multiplied by hundred. (Number of Repeat Guests / Total Guests) x 100. 

Learn More About Market Types: Dive into the different types of hotel market segmentation.

Wrapping up:

No matter whether you’ve just joined the hotel industry or working as an experienced hotelier, knowing these terminologies or industry jargons is super important for you to face this field.

The above guide has given you insights from A to Z on common terminologies that a hotelier uses every day when they deal with guests and communicate with management. 

Knowing these buzzwords can help you enhance your guest experience and manage your routine operations with ease.