Hotel Revenue Management Glossary

Average revenue earned per occupied room per day, calculated as room revenue divided by rooms sold.

ADR = Total Room Revenue ÷ Rooms Sold

If your hotel sold 100 rooms last night for a total of $15,000, your ADR is $150. ADR ignores empty rooms - that's why it's misleading on its own and why pros pair it with occupancy and RevPAR. A rising ADR with falling occupancy almost always means you priced yourself out of the market on the shoulder nights.

A block of rooms set aside for a specific channel, group, or wholesaler at agreed rates and release terms.

Allotments are how hotels pre-commit inventory to tour operators, corporate accounts, or OTAs without overselling. Each comes with a release date - the cutoff after which unsold rooms return to general inventory. Watching wash on group allotments (the percent that never gets picked up) is one of the most overlooked levers in revenue.

The average number of nights a booked guest stays, calculated as room nights divided by reservations.

ALOS = Total Room Nights ÷ Number of Reservations

ALOS is the quiet metric that controls labor cost, turnover, and how aggressively you can stretch a peak night. A property with ALOS 1.4 burns housekeeping; one with ALOS 3.6 has fewer arrivals to manage and predictable F&B. Push ALOS upward via min-stay restrictions on compression nights instead of discounting.

The owner-side professional who oversees a hotel's financial performance and capital decisions on behalf of the owner.

Where a GM runs the property and a revenue manager runs the rate, an asset manager protects the equity. They benchmark RevPAR and GOPPAR against the comp set, push ROI on capex, and decide when to renovate, refinance, or sell. Most independent hotels don't have one. Most institutional portfolios do.

Rate decisions pushed automatically by an RMS or AI system based on demand signals, with optional human approval.

Auto-pricing is the spectrum from advisor (system suggests, RM approves) to autonomous (system pushes within guardrails). The right setting depends on data quality and how much risk you're willing to absorb on a Tuesday at 2am. Most properties run hybrid: autonomous on shoulder nights, manual on compression and group displacement decisions.

The lowest unrestricted rate available to the public on a given night, used as the published benchmark across all channels.

BAR is the rate most consumers see first - and the rate parity contracts hold you to. BAR-by-day-of-week (BAR1, BAR2, etc.) creates fences that move with demand without breaking parity. A poorly managed BAR is the fastest way to leak margin to OTAs while losing direct bookings.

The rate at which reservations are accumulating for a future date, compared against same-time-last-year or budget.

Pace = Current On-the-Books ÷ STLY On-the-Books

Pace tells you whether next month is ahead, on, or behind. A 105% pace 30 days out doesn't always mean a great month - it can mean you discounted early. Always read pace alongside ADR pace and segment pace to know whether you're filling with the right business.

The number of days between when a reservation is made and the arrival date.

Booking windows shape your pricing strategy. Long windows (60+ days) reward early-bird rates and group prospecting; short windows (under 7 days) demand aggressive last-minute pricing and OTA saturation. Watch shifts in window length - a sudden contraction is the earliest signal of softening demand.

The operational and design rules a franchise or chain enforces across affiliated properties.

If you're a Hyatt Place, Hampton, or Marriott property, brand standards govern everything from amenity kits to rate structure to channel restrictions. They protect the brand promise but constrain pricing flexibility. Independent hotels skip them; flagged hotels live with them.

Software that synchronizes rates and availability between your PMS and every distribution channel (OTAs, GDS, brand site).

Without a channel manager, you'd be hand-updating Booking.com, Expedia, your CRS, and the GDS every time inventory changes. With one, a single rate change pushes everywhere in seconds. The trade-off: another system in the stack, another vendor to integrate, and another place a sync error can cost you a sold-out room.

The percentage breakdown of bookings across each distribution channel - direct, OTA, GDS, wholesaler, group.

Channel mix is the single biggest lever on net ADR. A 70/30 direct-to-OTA mix can be more profitable than a 90/10 mix at a higher gross ADR - depending on commission structure and acquisition cost. Track net ADR by channel monthly. The leak is rarely where you think.

The hand-picked group of competitor hotels you benchmark performance against using STR or rate-shopping data.

A good comp set is 4-6 hotels of similar quality, location, and customer profile - not just the ones across the street. STR uses your comp set to compute MPI and RGI. Refresh it annually; the moment your comp set stops reflecting your actual competition, every benchmark report becomes noise.

Total operating cost divided by rooms sold - the breakeven rate per occupied room.

CPOR = Total Operating Costs ÷ Rooms Sold

CPOR is the floor under your ADR. If your CPOR is $62 and your loss-leader rate is $59, you're paying guests to stay. Most operators don't know their true CPOR because they don't allocate variable cost (housekeeping, amenities, F&B subsidy) accurately. Get this right before you set a single rate.

The booking engine and inventory hub for a chain or independent group, sitting between the PMS and external channels.

Independent hotels often skip the CRS layer; chains and groups can't operate without one. The CRS holds master rates, manages multi-property availability, and powers the brand.com booking engine. It's the single source of truth before anything pushes to the OTA stack.

The change in rooms on the books for a future date over the past 24 hours.

Daily Pickup = Today's OTB − Yesterday's OTB (for arrival date)

Daily pickup is the heartbeat of pace tracking. Normal pickup for a Tuesday three weeks out is wildly different from a Saturday during compression. Build expectations by day-of-week and lead time, then watch for anomalies - a flat pickup day where you usually see 8 rooms is the earliest demand-soft signal you'll get.

The process of predicting future room demand using historical data, pace, market signals, and external events.

Forecasting is what separates a revenue manager from a rate clerk. The best forecasts blend STLY pace, segment behavior, comp-set rates, calendar events, weather, and air-traffic data. Modern RMS and AI tools automate the math - but the judgment of what to override and why still belongs to a human.

A reservation made directly through the hotel's website, phone, or walk-in - skipping OTA commission.

Direct bookings carry zero distribution cost beyond payment processing - making net ADR 15-25% higher than OTA bookings at the same gross rate. The catch: you have to earn them. A direct booking strategy stacks loyalty perks, member rates, AdWords brand defense, and metasearch parity to win the click.

Calculating whether accepting a group, contract, or wholesale rate would displace higher-paying transient business.

Displacement is the mental math behind every group decision. If a group at $99 pushes out 30 transient rooms that would have sold at $189, you've displaced $90 × 30 = $2,700 in revenue. Always include ancillary spend, future-stay value, and shoulder-night fill before deciding. Most groups look better than they pencil.

A pricing strategy where rates flex in real time based on demand, pace, comp-set rates, and lead time.

Dynamic pricing replaces static rate calendars with rules that respond to live demand signals. The goal isn't always higher rates - sometimes it's the discipline to hold a rate when the system says it should drop. Done well, it captures 5-15% more RevPAR; done blindly, it trains every customer to wait for the dip.

A discounted rate offered for non-refundable bookings made well in advance of arrival.

Early-bird rates lock in revenue early and lengthen the booking window - useful for new properties, off-season demand generation, and forecasting confidence. The discount typically runs 10-15% in exchange for a non-refundable, prepaid commitment. Be careful with cannibalization - every early-bird booking is a regular-rate booking that didn't happen.

A leisure traveler booking individually rather than as part of a group or tour, typically at retail or wholesale rates.

FIT is the mainstream transient leisure segment - the highest-yielding, most-targeted business for resorts, urban boutiques, and destination hotels. They book early, stay longer, and spend on F&B and amenities. Watch FIT pace closely; a softening here is a softening of the leisure market, not just your hotel.

How closely a forecast matched actual results, typically measured at 30/14/7-day intervals before arrival.

Accuracy = 1 − (|Forecast − Actual| ÷ Actual)

Forecast accuracy is the trust score on your demand model. Best-in-class shops hit 95%+ at 7 days out. The trick is breaking down errors by segment, day-of-week, and lead time - a 95% blended number can hide a 60% accuracy on group conversions and a 99% accuracy on transient. Fix the leak, not the average.

Showing different rates or content to users based on their physical location detected via IP or GPS.

Geo-fencing lets you offer a member rate to in-region guests, a higher rate to cross-border bookers, or block-out specific markets where parity contracts demand it. Used carefully, it's a precision tool. Used carelessly, it triggers OTA contract violations and customer complaints when prices don't match across devices.

Profit per available room after operating expenses - the bottom-line equivalent of RevPAR.

GOPPAR = (Total Revenue − Operating Expenses) ÷ Available Rooms

RevPAR is what revenue managers chase. GOPPAR is what owners actually care about. A property can grow RevPAR while GOPPAR stays flat - rising labor and amenity costs eating the lift. Every rate decision should pass a GOPPAR sniff test, not just a RevPAR one.

A set of rooms reserved for a single group event - wedding, conference, sports team - under one contract.

Group blocks include a rate, cutoff date, attrition clause, wash factor, and rooming list. Most groups don't fully pick up - wash of 10-25% is normal. Build your forecast around expected pickup, not contracted block. And always run displacement before signing.

The number of occupied rooms in the hotel right now, used for daily operations and same-day forecasting.

Front desk, housekeeping, and F&B all start their day with the house count. It tells the executive chef how many breakfasts to prep, the housekeeping manager how many checkouts to schedule, and the GM whether to walk anyone tonight. A live house count tied to the PMS prevents the most expensive operational mistakes.

The total number of rooms available to sell on a given night, by room type and channel.

Inventory is the raw material of revenue management. Out-of-order rooms, OTA allocations, group blocks, and unsold inventory all count differently. The most expensive mistake is closing inventory by room type when you should be closing by channel - losing direct bookings because you blocked OTA inventory.

Pricing rules that require a minimum number of nights to book, used to protect compression dates from one-night stays.

LOS restrictions ('MinLOS 3' on a Saturday during a sold-out concert weekend) push bookers to take Friday and Sunday too. Used surgically, they extend ALOS and lift weekend revenue. Used clumsily, they kill conversions and shove demand to the comp set. Test by day-of-week, not blanket weeks.

A rate priced below cost to attract bookings and recover margin through ancillary spend, repeat stays, or compression nights.

Loss leaders are dangerous. They train OTAs to prefer your hotel, train guests to expect the rate, and feed back into your STR average - depressing your benchmark. Use sparingly: a 2-night opening rate for a new property, a true off-season liquidation. Never as a habit.

Your occupancy as a share of the comp set's occupancy, indexed to 100. Above 100 = winning your fair share.

MPI = (Your Occupancy ÷ Comp Set Occupancy) × 100

MPI of 100 means you captured your fair share of demand. 110 means you outperformed; 90 means you lost share. MPI alone doesn't tell you why - you can win MPI by undercutting (low ADR) or by being preferred at parity. Always read with ARI (rate index) and RGI (yield index).

A pricing structure that sets distinct base rates for business-driven mid-week and leisure-driven weekend nights.

Hotels with mixed transient demand price Mon-Wed lower (corporate) and Fri-Sun higher (leisure). Resorts and boutiques often invert it. The decision points: comp-set behavior, segment mix by day, and group displacement risk. Many properties leave 2-4% RevPAR on the table because they price by week, not by night.

A guest with a confirmed reservation who fails to arrive and is typically charged the first night's rate.

No-shows hurt twice: you lose the spend opportunity and you might have walked someone earlier. Track no-show rate by segment - group and OTA bookings have higher rates than direct. Modern overbooking models build expected no-shows into capacity planning, recovering 1-3% RevPAR most operators leave on the table.

A reservation status indicating the booking is held but no specific room type or rate is guaranteed.

NRG bookings are mostly seen in waitlist and standby contexts - corporate accounts, last-minute group adds, distressed inventory swaps. They give the front desk flexibility but require careful tracking, since they don't show in standard occupancy projections. Useful tool, easy to forget.

The percentage of available rooms that are sold on a given night.

Occupancy = (Rooms Sold ÷ Rooms Available) × 100

Occupancy is the most intuitive KPI but the most easily misread. 100% occupancy at $89 ADR is a worse outcome than 78% occupancy at $189. Pair it with ADR to see RevPAR - the only number that captures both at once. Also: track by day-of-week and segment, never as a monthly blended average.

A third-party booking platform - Booking.com, Expedia, Agoda - that resells hotel inventory for a commission.

OTAs charge 15-25% commission and dominate hotel demand discovery. Loved for the volume, hated for the margin. The right OTA strategy treats them as a billboard for first-time guests, then moves repeat business to direct via loyalty, member rates, and remarketing. Avoid going dark - OTAs reward inventory; punish silence.

A bonus commission paid to a travel agent or OTA for hitting agreed booking thresholds, on top of the base rate.

Override commissions are the lever wholesalers and TMC (travel management companies) use to push volume. Common in corporate and group business. Always model overrides into your net ADR - a 10% base + 5% override = effectively 15% commission, which can flip a profitable segment into a loss leader.

A daily or weekly report comparing on-the-books bookings against same-time-last-year and budget targets.

The pace report is the single most-read document in revenue management. It surfaces variance by day, segment, channel, and lead time - flagging where to act. Best-in-class pace reports include forecast deltas (where you are vs where you should be) and call out specific intervention windows.

The cumulative count of net new reservations made over a defined window for a future arrival date.

Pickup answers 'how much business did we add this week for that night?' Tracked over rolling 7- and 30-day windows, it tells you whether demand is accelerating or stalling. Decompose by segment to see which business is converting - group, transient, OTA, direct. The shape of pickup matters as much as the volume.

The hotel's central operations system handling reservations, check-in, billing, housekeeping, and reporting.

Opera, StayNTouch, Mews, Cloudbeds, RoomKeyPMS - these are the PMS platforms running daily ops at most properties. Every other system in the stack (RMS, channel manager, CRS, BI) reads from or writes to the PMS. A bad PMS integration kills downstream automation; a good one is the foundation of every revenue automation play.

A contractual obligation requiring a hotel to publish identical rates across all public channels for the same room and date.

Rate parity is the OTA's protection against being undercut. Most contracts require parity on public, unrestricted rates. Member rates, private channels, and corporate rates are typically exempt - the workaround most direct-booking strategies exploit. Break parity in public and the OTAs will downrank you, raise commission, or cancel.

Automated monitoring of comp-set rates across OTAs and brand sites to inform your own pricing decisions.

Rate shoppers - OTA Insight, Lighthouse Rate Insight, RateGain - pull comp-set rates every few hours across channels. The output feeds your dynamic pricing model and BAR-by-day-of-week strategy. Don't blindly match: shop intelligently. A comp drop that's 24 hours old is signal; one that's 4 weeks old is noise.

The hotel professional responsible for setting rates, forecasting demand, and maximizing room revenue.

A revenue manager owns the rate calendar, the pace report, the comp-set strategy, and the channel mix. They sit between sales (who want the group) and the GM (who wants the occupancy) - and balance both against owner expectations on RevPAR and GOPPAR. The best ones blend math, judgment, and operator instinct.

Room revenue divided by total available rooms - the headline KPI capturing both rate and occupancy in one number.

RevPAR = ADR × Occupancy = Total Room Revenue ÷ Available Rooms

RevPAR is the single most-watched number in hotel revenue management. It rolls ADR and occupancy into one comparable metric, making it perfect for benchmarking against the comp set, prior year, and budget. The catch: RevPAR ignores cost. Two hotels with identical RevPAR can have radically different GOPPAR.

Your RevPAR as a share of the comp set's RevPAR, indexed to 100. The yield equivalent of MPI.

RGI = (Your RevPAR ÷ Comp Set RevPAR) × 100

RGI is the headline benchmark on your STR report. 100 means you captured your fair share of revenue; above means winning, below means losing. Track all three together - MPI (occupancy share), ARI (rate share), RGI (revenue share) - to know whether to push rate, push occupancy, or both.

Software that automates demand forecasting, rate optimization, and price recommendations for hotel inventory.

IDeaS, Duetto, Atomize, Lighthouse, RevEvolve - these are the RMS platforms running pricing math at modern hotels. The right RMS adds 5-15% RevPAR over manual pricing. The wrong one (or a misconfigured one) creates shadow IT and revenue managers who don't trust the recommendations. Calibration and workflow integration matter more than feature lists.

Decomposing room revenue by booking segment - transient, group, contract, wholesale, FIT - to reveal mix-driven performance.

Two hotels with the same RevPAR can have wildly different P&Ls based on segment mix. Group is sticky but lower-yield; transient is high-margin but volatile. Segment analysis exposes which segments are growing, which are leaking, and where to push acquisition spend. Always slice by segment AND lead time.

The transition period between peak and off-season - typically softer demand at compromised rates.

Shoulder periods are where bad pricing strategies get exposed. Discount too early and you cannibalize peak; hold rate too long and you sit empty. The shoulder is also where channel mix shifts - direct softens first, OTAs hold longer. Build a separate shoulder strategy, don't shoehorn peak rules.

A pace comparison anchor - what your on-the-books bookings looked like at the same point in time one year ago.

STLY is the default reference frame for booking pace and forecast accuracy. It controls for seasonality but not for events, demand shifts, or major calendar changes (like Easter falling in March vs April). Smart shops blend STLY with budget pace and 3-year-average pace to cancel out year-specific noise.

Total revenue (rooms + F&B + ancillary) divided by available rooms - RevPAR's full-property cousin.

TRevPAR = Total Revenue ÷ Available Rooms

TRevPAR captures the whole guest spend, not just the room. For resorts, full-service hotels, and properties with strong F&B or ancillary revenue, TRevPAR tells a truer story than RevPAR alone. A hotel that wins RevPAR while losing TRevPAR is selling rooms at the expense of total spend.

The total demand for a hotel on a given night if there were unlimited rooms and no rate or restriction barriers.

Unconstrained demand is the theoretical ceiling - what you would have sold if you'd had infinite inventory at the right rate. Forecasting models estimate it to surface compression nights where MinLOS, closeouts, or rate increases will outperform. Without it, you're optimizing a constrained metric (occupancy) and missing real revenue lift.

The portion of operating cost that changes with each occupied room - housekeeping, amenities, F&B subsidy, utilities.

Variable cost is the difference between gross room revenue and contribution margin. A common rule of thumb: $30-50 per occupied room at limited-service properties, $80-150 at full-service and resort. Knowing your true variable cost is the only way to know if a discount rate adds margin or erodes it.

Sending an arriving guest to another hotel because the property is overbooked, with the original hotel covering costs and rebooking.

Walking happens when overbooking outpaces no-shows. Done well, it's a controlled outcome of a yield-maximizing overbooking model. Done badly, it's a service disaster that costs you future bookings, OTA review penalties, and chargebacks. Always walk strategically: lowest-spend, lowest-loyalty guest first, with a hand-off and follow-up call.

A modeling tool that previews the revenue impact of a rate, restriction, or strategy change before it goes live.

What-if simulation answers 'if I drop weekend rates by 8%, what happens to RevPAR over the next 30 days?' Modern RMS and AI tools run these scenarios in seconds against historical pace and demand curves. The discipline: simulate before you push, and track the prediction vs the outcome to calibrate the model over time.

The discipline of selling the right room to the right customer at the right price at the right time.

Yield management is the foundational philosophy hotel revenue management is built on. It's the umbrella over dynamic pricing, LOS restrictions, segment optimization, and channel mix decisions. Modern revenue management is yield management plus AI math - but the principles haven't changed since American Airlines invented the discipline in the 1980s.