Hotel Industry Glossary

The average revenue earned per occupied room per day. ADR is calculated by dividing total room revenue by the number of rooms sold. It is one of the three core KPIs in hotel revenue management alongside occupancy and RevPAR.

The most important metric in hotel revenue management. RevPAR measures how effectively a hotel fills its rooms at the best possible rate. It combines both occupancy and ADR into a single performance indicator.

The percentage of available rooms that are occupied during a given period. Occupancy is a key input into RevPAR and is used alongside ADR to assess overall revenue performance.

Third-party websites that sell hotel rooms on behalf of hotels, typically charging a commission of 15–25% per booking. Major OTAs include Expedia, Booking.com, Hotels.com, Priceline, and Agoda. Managing OTA channel mix is a core function of hotel revenue management.

A network used by travel agents and corporate travel managers to book hotel rooms, flights, and car rentals. Major GDS platforms include Sabre, Amadeus, and Travelport. GDS is particularly important for hotels targeting corporate and group business.

Software that connects a hotel's property management system (PMS) to multiple OTA channels simultaneously, enabling real-time rate and availability updates across all platforms from a single interface.

The core operational software used by hotels to manage reservations, check-ins, check-outs, room assignments, billing, and reporting. Common PMS platforms include Opera, Cloudbeds, Mews, and RoomKey.

The leading provider of hotel industry benchmarking data. STR collects performance data from hotels worldwide and provides competitive set (comp set) reports that allow hotels to compare their ADR, occupancy, and RevPAR against similar properties in their market.

A measure of a hotel's RevPAR performance relative to its competitive set. An index of 100 means the hotel is capturing its exact fair share. Above 100 means outperforming; below 100 means underperforming. Also broken into Market Penetration Index (MPI) for occupancy and Average Rate Index (ARI) for ADR.

The group of hotels that a property competes directly with for guests. Typically 4–6 hotels of similar brand, size, location, and price point. Comp set performance is tracked via STR reports and is the primary benchmark for revenue management success.

A revenue management strategy where hotel room rates are adjusted in real time based on demand signals, competitive rates, booking pace, and market conditions. Dynamic pricing replaces static rate strategies and is the foundation of modern hotel revenue management.

The lowest publicly available rate for a hotel room on a given night, typically displayed on the hotel's website and OTA channels. BAR is the starting point for dynamic pricing strategies.

The practice of maintaining the same room rate across all distribution channels — OTAs, GDS, and the hotel's own website. Rate parity is often required by OTA contracts and is important for maintaining brand integrity and avoiding channel conflict.

A reservation made directly through the hotel's own website, phone, or email — bypassing OTAs and their commissions. Increasing direct bookings is a key revenue strategy because it eliminates the 15–25% OTA commission cost.

The rate at which reservations are being made for a future date. Monitoring booking pace allows revenue managers to identify demand trends early and adjust pricing strategy accordingly — raising rates when pace is ahead of last year, lowering when behind.

A daily report showing how many new reservations were made for future dates over a specific period. Pickup reports are essential for tracking booking pace and making informed rate decisions.

A professional certification awarded by the Hospitality Sales and Marketing Association International (HSMAI) to revenue management professionals who demonstrate mastery of hotel revenue management principles and practices.

An expanded version of RevPAR that includes all hotel revenue streams — rooms, food & beverage, spa, parking, and ancillary services — divided by total available rooms. TRevPAR provides a more complete picture of hotel revenue performance.

The practice of selling the right room to the right customer at the right price at the right time. Yield management is the precursor to modern revenue management and focuses on maximizing revenue from a fixed, perishable inventory (hotel rooms).

The ongoing fee paid by a hotel franchisee to a hotel brand (franchisor) in exchange for the right to operate under the brand's name, reservation system, and loyalty program. Franchise fees typically include royalty fees, marketing fees, and reservation fees totaling 8–12% of room revenue.

A contracted room rate agreed between a hotel and a corporate account, government agency, or travel management company. NRAs guarantee a specific rate for a defined period (typically one year) in exchange for a volume commitment from the account.

A formal request from a corporate travel buyer or meeting planner to hotels asking for their best rates and terms for a specific account or event. Hotels respond to RFPs through GDS platforms or directly. Winning RFPs is a core function of hotel sales management.

A rewards program offered by hotel brands that incentivizes repeat stays by awarding points redeemable for free nights, upgrades, and other benefits. Major hotel loyalty programs include Wyndham Rewards, Choice Privileges, Best Western Rewards, Marriott Bonvoy, Hilton Honors, and IHG One Rewards.

A hotel's RevPAR expressed as a percentage of the competitive set's average RevPAR. A penetration above 100% means the hotel is outperforming its comp set; below 100% means underperforming.