Hotel terminology: A complete guide for hotel owners

What is hotel terminology?

Hotel terminology is the specialised vocabulary and shorthand that hospitality professionals use to describe rooms, rates, technology, and performance metrics. This standardized language streamlines daily operations, from front desk check-ins to revenue management, ensuring clear communication across all hotel departments and with industry partners.

In this blog, we will unpack the essential terms, explain where they fit into daily operations, and show you how a firm grasp of this vocabulary translates into stronger results for your property.

Why is hotel terminology important for hoteliers?

Clear terminology keeps your team aligned, your data reliable, and your decisions faster. When everyone shares the same definitions of ADR, RevPAR, and parity, you cut out confusion that can stall revenue meetings or inflate costs. Precise language also strengthens communication with tech partners and third-party channels, so system integrations and rate updates happen without costly errors.

Precise language also strengthens communication with tech partners and third-party channels, so system integrations and rate updates happen without costly errors. Plus, industry-standard terminology cuts new hire training time, boosting productivity from day one.

Key takeaways

• A shared vocabulary removes guesswork and helps teams spot trends before they become problems.
  
• Accurate terms make financial reports clearer for owners and investors, backing up your recommendations with trusted data.
• Industry-standard language speeds up training for new hires, cutting onboarding time and boosting productivity sooner.

What abbreviations should you know?

ABVPAR (Average booking value per available room)

Divides total booking value by the number of available rooms to reveal how much revenue each room could generate.

ADR (Average daily rate)

Shows the average room revenue earned from sold rooms over a given period.

ALOS (Average length of stay)

The mean number of nights each booking spans, calculated by dividing total room nights by total reservations.

BAR (Best available rate)

Your lowest unrestricted, publicly shown rate for a specific date; often flexible and used as a pricing benchmark.

BEO (Banquet event order)

A detailed document that lists every element and cost of a function, ensuring all departments deliver the same guest promise.

BRG (Best rate guarantee)

A hotel pledge that guests will not find a lower public price elsewhere if they book direct.

BOH (Back of house)

Staff-only areas such as kitchens and offices where operational work happens away from guests.

CPOR (Cost per occupied room)

Total operational costs divided by the number of occupied rooms, showing the average expense to service each paying guest and helping identify cost-efficiency opportunities.

CRM system (Customer relationship management)

Software that stores guest profiles, tracks interactions and supports tailored marketing.

CRS (Central reservation system)

The inventory and rate hub that pushes your data to every channel, reducing double-selling and price errors.

CTA (Closed to arrival)

A yield restriction preventing check-ins on a specific date to protect high-demand periods.

CTD (Closed to departure)

Blocks check-outs on a chosen date, encouraging guests to stay through a peak night.

DND (Do not disturb)

A guest status that tells staff to skip room entry, which adjusts housekeeping schedules.

ETA (Estimated time of arrival)

Information from guests that helps front-desk and concierge teams plan staffing and service.

F&B (Food and beverage)

All outlets and revenue from restaurants, bars, room service and banqueting.

FOH (Front of house)

Guest-facing areas such as reception, lobby and concierge that shape first impressions.

GOPPAR (Gross operating profit per available room)

Gross operating profit divided by available rooms, giving a room-level view of profitability after operating costs.

KPI (Key performance indicator)

A measurable value such as RevPAR or occupancy used to gauge success against goals.

Maximum length of stay

A booking rule that caps how many nights one reservation can span, preventing long-range inventory blockages.

MICE (Meetings, incentives, conferences and exhibitions)

A segment that drives group room nights and event revenue.

MLOS (Minimum length of stay)

Requires reservations to include at least a set number of nights, protecting shoulder dates.

MPI (Market penetration index)

Compares your occupancy against a competitive set; a score above 100 shows stronger market share.

NRB (Negotiated rate business)

Contracted corporate or agency accounts that commit to volume at agreed rates.

OTA (Online travel agency)

Third-party site like Booking.com that sells rooms for commission and expands distribution reach.

OTB (On the books)

Confirmed future reservations or revenue already secured for upcoming dates.

PAX (Passengers / persons)

Shorthand for the number of people attending an event, dining or travelling.

PMS (Property management system)

Core hotel platform managing reservations, billing, check-in, housekeeping and reporting.

PMG (Price match guarantee)

Assures guests that the hotel will match any lower qualifying rate found elsewhere, encouraging direct bookings.

RevPAR (Revenue per available room)

ADR multiplied by occupancy; offers a quick snapshot of how efficiently you sell and price available rooms. See also: RevPAM.

POS (Point of sale)

System that processes payments in outlets and posts charges back to guest rooms through the PMS.

RevPOR (Revenue per occupied room)

Room revenue divided by occupied rooms, highlighting how much each paying guest contributes.

SOP (Standard operating procedure)

A documented, step-by-step guideline that ensures tasks are performed consistently.

STR report (Smith Travel Research report)

Benchmarking report that compares your ADR, occupancy and RevPAR with local competitors.

TRevPAR (Total revenue per available room)

Total hotel revenue, including rooms, F&B and extras, divided by available rooms to show complete earning power.

YTD (Year to date)

Aggregates performance from 1 January to today for trend tracking and budget reviews.

What are the most frequently used hotel terms?

Availability

The total number of rooms you still have to sell for a given date or date range. Revenue managers track availability daily to guide pricing and marketing moves.

Booking engine

The online tool on your website that lets guests check rates and confirm reservations in real time without leaving your site.

Channel manager

Software that pushes live rates and inventory from your PMS to OTAs, GDSs and metasearch channels so every platform shows accurate data.

Channel mapping

The process of linking each room type and rate plan in your PMS to the matching fields on every connected channel, ensuring information flows correctly.

Commission

The fee an OTA, travel agent or wholesaler charges for each reservation, usually a percentage of room revenue.

Double booking

When two reservations are made for the same room on the same date, often caused by slow or manual inventory updates.

Extended stay

A booking that keeps a guest in-house for seven nights or more, often at a discounted rate and with apartment-style amenities.

House count

The real-time snapshot of total occupied, vacant and out-of-order rooms in the hotel. Front-desk teams use it to balance walk-ins, upgrades and maintenance.

Invoice

A bill sent to a guest or company that details charges for accommodation, food and other services and shows payment terms.

Lead time

The number of days between when a guest books and when they arrive. Short lead times can signal stronger last-minute demand.

Metasearch

Price-comparison sites such as Google Hotels or Trivago that display rates from multiple OTAs and your direct channel side by side.

Net rate

The room price you offer to partners after commission has been removed. Wholesalers and tour operators add their margin before selling to travellers.

Package rate

A bundled offer that combines the room with extras such as breakfast, parking or spa treatments under one price.

Payment gateway

A secure service that authorises and processes online card payments, protecting card-holder data and reducing fraud risk.

Rate plan

A set of pricing rules for a room type, including meal inclusions, cancellation terms and minimum-stay requirements.

Service contract

A formal agreement that outlines ongoing support, maintenance or supply terms with vendors such as laundry or technology providers.

System of record

The authoritative source of truth for a specific data set. In most hotels, the PMS is the system of record for guest profiles and reservations.

Vacancy

Any room that is clean, available and ready for sale. A high vacancy count during peak season signals a pricing or marketing issue.

SM: Social Proof Panel (Indicate ID# from this sheet)

What are essential hotel vocabulary for hospitality professionals?

Essential hotel vocabulary refers to the shared set of terms and acronyms hospitality professionals use to describe key metrics, pricing tactics, operations and technology. Knowing this language prepares every department to act quickly, avoid miscommunication and link daily choices to performance data.

Need to know

• RevPAR dominates performance tracking. 77.4% of revenue managers name it as their primary metric, so everyone must understand the terms that feed into it, including occupancy and ADR.
  
• PMS terminology keeps data clean. 86% of hoteliers consider the property-management system their most important technology, making concepts like system of record, night audit, and channel management business-critical.
  
• Occupancy underpins every major KPI. It’s a daily health check that also drives both ADR and RevPAR calculations, so fluency in occupancy-related terms such as stop sell, overbooking and room block helps prevent revenue leaks.

Audit trail

A chronological record of every change or transaction in your hotel systems, showing who did what and when. It supports accountability, fraud prevention and compliance checks.

Channel management

The discipline and technology of distributing live rates and availability across OTAs, GDSs, metasearch and direct channels from one control point.

Comp set

A competitive set of similar hotels against which you benchmark occupancy, ADR and RevPAR to gauge performance.

Device asset

Any physical hardware under hotel ownership, from smart thermostats to handheld POS units, tracked for maintenance, depreciation and security.

Dynamic packaging

A booking flow that lets guests build customised bundles such as room, flights, car hire and experiences in real time, lifting ancillary revenue.

Function room occupancy

The percentage of meeting, banquet or ballroom space booked over a given period, used to measure event-space efficiency.

Gross margins

The share of total revenue left after direct costs such as housekeeping supplies and F&B ingredients are removed.

Hotel sustainability

Practices and policies that cut environmental impact, improve social outcomes and boost operational efficiency, from energy management to waste reduction.

Inventory grid

A matrix in your PMS or channel manager that displays room types, dates, rates and availability at a glance for fast updates.

Loyalty program

A structured scheme that rewards repeat guests with points, perks or tier benefits, encouraging higher lifetime value.

Net sales

Total sales revenue minus refunds, discounts and allowances; the figure that most closely represents true top-line income.

Night audit

End-of-day reconciliation that rolls the business date, balances ledgers and flags discrepancies before the new shift starts.

Overbooking

Selling more rooms than you physically have to offset expected cancellations and no-shows; requires tight controls to avoid guest displacement.

Rate parity

Keeping an identical public rate for the same room across every sales channel to prevent undercutting and maintain brand credibility.

Room block

A cluster of rooms set aside for a group, conference or wedding, often under a special rate or release date.

Sundries

Low-value, miscellaneous items such as snacks, postcards or travel-size toiletries that generate add-on revenue.

Turnover rate

The percentage of employees who leave and must be replaced within a given time frame; high turnover inflates recruitment and training costs.

Understaffing

Operating with fewer employees than required, which strains service quality and staff morale.

Competitor-based pricing

Setting your room rate by monitoring and responding to what your comp set is charging rather than basing price solely on internal costs.

Demand-based pricing

Adjusting rates in line with fluctuations in market demand, seasonality or major events.

Dynamic pricing

Automated, rule-driven rate changes that combine competitor, demand and booking-pace data to maximise revenue at any moment.

Early bird

A discounted rate offered to guests who book well in advance, boosting base demand and cash flow.

EBITDAR

Earnings before interest, taxes, depreciation, amortisation and rent; a profitability metric useful for comparing asset-heavy hotels.

Flash sales

Short-window promotions, often twenty-four to seventy-two hours, that market deep discounts to stimulate rapid bookings and generate buzz.

Forecasting model

A statistical or machine-learning tool that predicts future demand, occupancy, ADR and revenue to guide budgets and staffing.

Lose-it rate

The absolute lowest rate you are willing to accept before turning the business away because costs outweigh revenue.

Market segmentation

Categorising guests by traits such as purpose of travel, geography or booking channel to tailor pricing, marketing and service.

Occupancy rate

The percentage of available rooms that are sold during a specific period, a core indicator of demand.

Rate fences

Rules that separate customer segments by willingness to pay, for example non-refundable terms, minimum-stay requirements or package inclusions.

Revenue management

The strategic use of data, pricing and inventory controls to sell the right room to the right guest at the right time for the right price.

Revenue optimisation

A holistic approach that extends revenue-management principles across all departments, including rooms, F&B and spa, to grow total property revenue.

Stop sell

A restriction that closes sales of a specific rate plan or channel when demand is high or inventory is constrained.

Upselling

Encouraging guests to purchase a higher-value room or add-on service during booking or at check-in, boosting average spending.

Value added pricing

Maintaining the base rate while bundling extra perks such as breakfast, parking or late checkout to compete on value instead of deep discounts.

Yield management

Tactical adjustments of price and inventory in response to booking pace, remaining supply and time to arrival, aiming to maximise RevPAR.