Hotel revenue glossary
The words behind hotel pricing, defined in one sentence each and explained for a small UK hotel.
Updated
- ADR
- ADR, or average daily rate, is room revenue divided by the number of rooms actually sold, so it tells you the average price guests paid per room per night.
- BAR
- BAR, or best available rate, is the lowest publicly available price for a room on a given night with no restrictions beyond the standard terms.
- Channel manager
- A channel manager is software that connects a hotel's rates and availability to the sites it sells through, so one change updates every channel at once.
- Compression night
- A compression night is a night when demand across a town is so strong that most hotels sell out or near-sell out, leaving little room for guests to shop around.
- Lead time
- Lead time is the number of days between the day a guest books a room and the day they arrive.
- Length of stay
- Length of stay is the number of nights a guest books in one reservation, and hotels often use it to set minimum stays or different prices for longer bookings.
- Occupancy
- Occupancy is the share of your available rooms that were sold on a given night, calculated as rooms sold divided by rooms available.
- OTA commission
- OTA commission is the percentage of a booking's price that a hotel pays to an online travel agency, such as Booking.com or Expedia, when a guest books through it.
- Pace
- Pace is a comparison of the bookings you hold today for a future date with the bookings you held at the same point before that date last year.
- Pickup
- Pickup is the number of rooms booked over a set period, usually the last day or week, for a given future date.
- Rate parity
- Rate parity means a hotel charges the same price for the same room and terms on every channel it sells through, including its own website.
- Rate shopper
- A rate shopper is a tool that shows you the prices your competitors are charging for the same nights, so you can compare your own rates with the market.
- Revenue management system
- A revenue management system (RMS) is software that studies demand, competitor prices and your own bookings to recommend the room rates a hotel should charge.
- RevPAR
- RevPAR, or revenue per available room, is a hotel's room revenue divided by the number of rooms it had available to sell, whether or not they were sold.