Hotel Terminology

A hotel's ADR (Average Daily Rate) is a measure used to calculate the average rate paid for a hotel room over a given period of time. It is calculated by dividing the total revenue from room sales by the total number of rooms sold. ADR is used to help analyze the performance of a hotel and can be used to compare hotels in the same market.

ALOS stands for Average Length of Stay, and it is a measure used in the hotel industry to assess the average number of nights that a guest stays in a particular hotel. This metric helps to inform hotel managers and owners of the average revenue generated per guest.

ARPAR (Adjusted Revenue per Available Room) is a metric used in the hotel industry that takes a variety of factors into account that influence hotel revenue. ARPAR can provide hoteliers with a more accurate view of profitability than RevPAR (Revenue per Available Room)

Average Rate Index (ARI) is a measure of the average rate charged by a hotel in a particular market compared to other hotels in the same market. It is typically calculated on a monthly basis.

CPOR stands for Cost per Occupied Room and is one of the most important metrics in the hotel industry. It is a measure of the total cost of operating a hotel divided by the number of occupied rooms for a given time period. CPOR is used to track the efficiency of hotel operations and compare performance against competitors.

CSAT in the hotel industry stands for Customer Satisfaction. This is a measure of how satisfied a customer is with the products and services they receive from the hotel. It typically includes surveys, online ratings, and analysis of customer feedback.

Full-service hotels cater to a specific type of traveler—those seeking a luxurious and convenient experience. These hotels offer a wide range of amenities and services to meet the needs and preferences of their guests. Below, we’ll explore what makes a full-service hotel different from other types of accommodations, including amenities, hotel tiers and the differences between full-service hotels and limited-service hotels.

GOPPAR (Gross Operating Profit per Available Room) is a hotel industry metric that measures a hotel's overall financial performance. It is calculated by dividing the total gross operating profit by the total number of available rooms in the hotel. GOPPAR is used to evaluate the revenue-generating potential of a hotel and is an important indicator of a hotel's financial health.

Green hotels, also known as eco-hotels or environmentally friendly hotels, are those committed to minimizing their environmental impact. This includes conserving resources, reducing waste and lessening your hotel's carbon footprint.

In the highly competitive industry of hospitality, hotel groups are always looking to improve their operational performance. That’s where hotel asset management comes in. Also known as hospitality asset management, it is the strategic oversight of hotel operations to achieve an owner's investment goals. It encompasses a wide range of activities, all focused on driving profitability and increasing the long-term value of a hotel property.

Imagine having a crystal ball that reveals guest preferences, competitor strategies and upcoming market shifts. In hospitality, that crystal ball is called hotel market intelligence. It's the art and science of gathering, analyzing and interpreting market data to gain a comprehensive understanding of your competitive landscape, guest behavior and the broader market trends. The ultimate goal? To give you a competitive edge. Armed with this knowledge, hotels can make informed decisions that drive occupancy, boost revenue, improve hotel performance and leave the competition in the dust.

Hospitality management involves overseeing all aspects of running a successful hotel, resort or other lodging establishment. This includes everything from sales and guest services to room operations and human resources.

Limited service hotels, sometimes referred to as select service hotels, are budget-friendly accommodations that prioritize comfortable essentials over extensive amenities.

MPI (Market Penetration Index) is a financial metric used in the hotel industry to measure the level of market penetration a hotel has achieved in a certain market. It is a useful measure for understanding how well a hotel is doing relative to its competitors in a given market.

NOI stands for Net Operating Income, which is a measure of a hotel's performance and profitability. Net Operating Income can vary widely from market to market and should be judged against other comparable properties in a hotel’s compset.

NPS, or Net Promoter Score, is a metric used by the hotel industry to measure customer loyalty and satisfaction. It is calculated by asking customers to rate their level of satisfaction with their experience and then subtracting the percentage of customers who responded with a negative review from the percentage of customers who responded with a positive review. The result is the Net Promoter Score, a number between -100 and +100 that tells hoteliers how likely their customers are to recommend their hotel to others.

Hotel occupancy rate is a measure of the percentage of available guest rooms that are occupied at a hotel at any given time. It is typically expressed as a percentage, and is calculated by dividing the number of rooms occupied by the total number of rooms available.

A property management system (PMS), also known as a hotel PMS or hospitality property management system, is a software solution designed to streamline and centralize critical operations within a hotel. This may include everything from reservations and housekeeping to reporting and the guest experience. Implementing a property management system for hotels can keep operations running smoothly by automating tasks and improving efficiency.

RevPAC (Revenue per Available Customer) is a metric that hotel owners and operators use to measure the average amount of revenue generated from each customer per night.

RevPAR (Revenue per Available Room) is a metric used in the hotel industry to measure the total revenue generated from a room in any given period of time. It is calculated by dividing the total revenue from hotel rooms by the number of available rooms in a given period of time. RevPAR is used to analyze a hotel’s performance and compare it against competitors in the same market.

While RevPAR and TRevPAR do have some things in common, there are some differences.

RGI stands for Revenue Generating Index (an alternative definition for RGI in hotels is “RevPar Index”) and is used to measure the financial performance of a hotel. It is calculated by dividing a property’s RevPAR by the aggregate RevPar of other comparable hotels in the local market. The higher the RGI, the more profitable a hotel is.

TRevPAR stands for Total Revenue per Available Room, and it is a key performance metric used in the hotel industry. It measures the total revenue generated by a hotel per available room, taking into account rooms sold, average daily rate, and other services provided by the hotel (such as food and beverage sales). TRevPAR is calculated by dividing total revenue by the total number of available rooms in the hotel.

Zero-based budgeting (ZBB) is a budgeting method where all expenses must be justified and recreated from scratch for each new budgeting period. Essentially, you start from a “zero base” each time.