- ADR (average daily rate)
- Rooms revenue divided by rooms sold. The pure price metric — it says nothing about how many rooms went empty, which is why it is never read alone.
- Occupancy
- Rooms sold divided by rooms available. Filling the house is easy at the wrong price, so occupancy is a volume signal, not a performance verdict.
- RevPAR (revenue per available room)
- Rooms revenue divided by rooms available, or equivalently ADR times occupancy. The industry's headline metric because it penalises both empty rooms and cheap ones.
- RevPAR index (RGI) and the comp set
- A property's RevPAR divided by the RevPAR of its chosen competitive set, indexed to 100 — also called RevPAR penetration. Above 100 means taking more than fair share. The comp set selection is itself a strategic decision, because an easy comp set produces a flattering index that hides real underperformance.
- GOPPAR
- Gross operating profit per available room. Moves the conversation from top line to profitability, and is the metric owners and asset managers care about most when judging an operator.
- TRevPAR
- Total revenue per available room, including F&B, spa, parking, and other departments. The right lens for resorts, boutique properties with destination restaurants, and anywhere rooms are not the whole business.
- Flow-through
- The share of incremental revenue that reaches gross operating profit. High flow-through on rate increases and poor flow-through on occupancy increases is why rate strategy beats volume strategy in most cases.
- CPOR (cost per occupied room)
- Variable cost of servicing one occupied room — linen, amenities, housekeeping labor, utilities. Sets the true floor beneath which selling a room destroys value.
- Total revenue management
- Pricing and yielding all revenue streams together — rooms, meeting space, F&B, parking, ancillaries — rather than optimising rooms in isolation. A group that pays a modest rate but fills the ballroom can outperform a higher-rate transient booking.
- Rate parity
- A contractual or practical requirement that a property not undercut the rates it gives an OTA on its own or other channels. Parity rules have been loosened or banned in several jurisdictions, which is what makes member-only and direct rates possible.
- BAR (best available rate)
- The publicly quoted, non-qualified rate for a given date, from which most discounts, negotiated rates and packages are derived. Changing BAR moves the entire rate structure downstream.
- Length-of-stay pricing and restrictions
- Yielding by stay pattern rather than by night — minimum-stay requirements, closed-to-arrival, and stay-through controls used to protect a high-demand night from being blocked by a single-night booking.
- Group, transient and contract
- The three primary demand segments. Transient books individually and pays the most flexible rate, group books in blocks with a contract, and contract business is fixed-rate committed volume such as airline crew. Each has different lead time, price sensitivity and cancellation behavior.
- Room block and cutoff date
- A block is a set of rooms held for a group at a contracted rate; the cutoff date is when unbooked rooms in that block return to general inventory. Cutoff management is where group revenue is quietly won or lost.
- Attrition and cancellation clauses
- Contract terms defining what a group owes if it fails to fill its block (attrition) or cancels outright. These clauses are the hotel's only protection against holding inventory for demand that never arrives.
- Room night
- One room occupied for one night — the atomic unit of hotel inventory and the denominator behind almost every metric. It is perishable: an unsold room night is revenue that can never be recovered.
- Pace report
- Bookings for a future date compared with the same point in time last year or against budget. Pace is the early-warning system that lets revenue managers act while there is still time to change the outcome.
- On-the-books (OTB)
- Reservations already confirmed for a future period. Read alongside pace and pickup, it tells you how much of the forecast is secured versus still to be sold.
- Displacement analysis
- The calculation of what transient revenue would be lost by accepting a group on a given date, including F&B and ancillary offsets. The discipline that stops a hotel from filling a compression night with cheap group business.
- Shoulder night
- The nights adjacent to a peak — typically Sunday and Thursday around a strong midweek or weekend pattern. Groups and events are often priced to pull demand into shoulder nights where the incremental value is highest.
- Compression night
- A night when citywide demand fills the market and every property can hold rate because there is nowhere else to go. Convention, festival and major event dates are the compression engine, which is why a convention center's calendar is a hotel's calendar.
- OTA commission
- The percentage an online travel agency takes on each booking. It is the largest single distribution cost for most independents and the reason net ADR, not gross ADR, is the honest comparison across channels.
- Merchant vs agency model
- In the merchant model the OTA collects payment from the guest and remits a net rate to the hotel; in the agency model the hotel collects and pays commission afterward. The two differ in cash timing, chargeback exposure, tax treatment and who owns the guest relationship.
- Direct booking and the book-direct advantage
- A reservation made on the hotel's own site, phone or desk, keeping commission and guest data in-house. The book-direct advantage — a member rate, a perk, or free cancellation not offered elsewhere — is the legal wedge that gets guests off the OTA after parity rules loosened.
- Loyalty enrollment
- Signing guests into a rewards program, usually at booking or check-in. Enrollment rate is a front-desk KPI at branded properties because enrolled guests book direct more often and at a lower acquisition cost.
- Brand.com share
- The proportion of bookings arriving through the brand's own website versus third parties. The core scorecard for whether a brand or an independent is winning back its own distribution.
- Metasearch and Google Hotel Ads
- Comparison surfaces that show a hotel's rate across OTAs and the hotel's own site side by side. Bidding here is how a property buys back its own name and puts the direct rate in front of a guest already in a booking mindset.
- GDS (global distribution system)
- The legacy reservation networks — Amadeus, Sabre, Travelport — through which travel agents, corporate booking tools and consortia access hotel inventory. Still the backbone of corporate and agency-booked business.
- Consortia and RFP season
- The annual cycle, typically running through autumn, in which hotels submit negotiated rates to corporate accounts and travel-agency consortia for the following year. Miss the window and a property loses a year of that account's volume.
- Corporate negotiated rate (LNR)
- A locally negotiated rate committed to a specific company in exchange for expected room-night volume. Reliable weekday base business, but it caps rate on nights the property could otherwise yield up.
- Wholesale and bed banks
- Bulk static rates sold to wholesalers and bed banks who repackage them, often for international or package distribution. High volume and low net rate, and a frequent source of rate leakage when those rates surface publicly.
- Opaque channel
- Distribution where the guest sees the price and general quality but not the hotel name until after booking. It moves distressed inventory without visibly discounting the published rate, at the cost of a guest who has no brand relationship.
- Franchise agreement and fees
- The contract under which an owner flies a brand's flag, typically covering royalty, marketing, reservation and loyalty fees plus brand standards, term and termination. The economics only work if the flag's incremental demand exceeds the total fee load.
- Management agreement
- A contract under which a third-party operator runs the hotel for the owner, usually for a base fee on revenue plus an incentive fee on profit, with performance tests that allow termination. Distinct from a franchise, and often stacked on top of one.
- Brand standard
- The mandated specifications a flagged property must meet, from mattress and shower fittings to breakfast format and loyalty recognition. Standards protect the brand promise and are simultaneously the owner's biggest source of non-negotiable capital and operating cost.
- PIP (property improvement plan)
- A brand-mandated renovation scope, usually triggered at franchise renewal, on sale, or at conversion. The PIP cost is a central negotiation point in almost every hotel transaction because it lands on the buyer.
- Key money
- Cash or an equity contribution a brand or operator gives an owner to win a management or franchise deal. It signals how badly a brand wants a location and is effectively a discount on the fee stream.
- Owner vs operator vs brand
- Three separate parties in the modern hotel: the owner holds the real estate and the P&L risk, the operator runs the business day to day, and the brand supplies distribution, standards and demand. Their incentives diverge — a brand wants system growth, an owner wants asset value — and most hotel disputes trace to that gap.
- Asset management
- The owner-side discipline of holding the operator accountable: reviewing budgets and forecasts, benchmarking against the comp set, approving capital, and deciding when to renovate, rebrand or sell.
- F&B capture ratio
- The share of in-house guests who eat or drink on property. A low capture ratio in a strong restaurant market usually means the outlet is designed for locals rather than guests, which is a legitimate strategy but changes how it should be measured.
- Banquet and catering revenue
- Revenue from meeting space, banquets, weddings and events, typically measured per square foot and per group room night. It is the highest-margin F&B in most hotels and often the deciding factor in whether a group booking is accretive.
- Resort fee and junk-fee disclosure
- A mandatory per-night charge added on top of the room rate. Regulators and legislators have moved decisively against advertising a rate that excludes unavoidable fees, requiring the total mandatory price to be shown up front in search results and rate displays.
- Ancillary revenue
- Everything sold beyond the room — parking, spa, retail, late checkout, upgrades, experiences, pet fees. It carries strong flow-through and is the main lever an independent has when rate is capped by the market.
- Housekeeping labor model
- How rooms get cleaned: credits or minutes per room, stayover versus departure cleans, opt-in daily service, in-house teams versus contracted labor. The largest controllable labor line in the hotel and the one most visible to guests when it is cut.
- Guest satisfaction index
- A composite score from post-stay surveys, tracked by brands against system averages and used in franchise compliance. Falling below threshold can trigger a brand action plan, so it functions as a contractual metric, not just a feedback loop.
- Reputation score and review response rate
- Aggregate review rating across Tripadvisor, Google, OTAs and brand surveys, plus how consistently and quickly management replies. Review position feeds both search visibility and rate power, which is why response rate is treated as an operational KPI.
- Soft brand vs independent
- A soft brand or collection lets a property keep its own name, design and character while plugging into a major's reservation system, loyalty program and sales force for a fee. A true independent keeps everything and pays for its own distribution — more freedom, more cost, more risk.
- Hotel valuation per key
- Purchase price divided by number of guest rooms, the quick comparison metric in hotel transactions. Useful for a first read, but it ignores meeting space, F&B, land value and deferred PIP, so it never replaces a discounted cash-flow view.