The Glossary
The Hotel Performance Glossary
Every term that runs a hotel — defined plainly, then read through the one lens that matters: profit.
A
- ADR — Average Daily RateThe average realised price of the rooms a hotel actually sold (also called Average Room Rate, ARR).
- AllotmentInventory contractually allocated to a channel or partner ahead of sale.
- Ancillary Revenue / UpsellingRevenue beyond the room rate — upgrades, F&B, and services — at near-zero acquisition cost.
- ARI — Average Rate IndexYour ADR share against the competitive set — how your pricing power stacks up against peers.
B
C
- Channel MixThe distribution of bookings across channels — ranked, in profit terms, by what each retains.
- CommissionThe cut an intermediary takes per booking — typically 15 to 25 percent for OTAs.
- Competitive Set (Compset)The defined group of rival hotels a property benchmarks itself against.
- Conversion RateThe efficiency of turning direct website traffic into bookings.
- CPOR — Cost Per Occupied RoomThe variable cost of servicing one occupied room — the hurdle every incremental booking must clear.
- CRS — Central Reservation SystemThe system holding rates and inventory and pushing them out to every channel.
- CTA — Closed to ArrivalA restriction blocking new arrivals on a date while allowing stay-throughs to continue.
- CTD — Closed to DepartureA restriction blocking departures on a date, steering stays to extend past a peak.
D
- Demand ForecastingPredicting future demand by segment and date to drive pricing, restrictions, and staffing.
- Direct Booking RatioThe share of bookings won directly — the highest-leverage input to ProfitPAR™.
- Displacement AnalysisDeciding whether group business is worth the transient revenue it displaces, judged on total value.
- Dynamic PricingContinuously adjusting rates to live demand, pace, and competitive positioning.
F
G
- GDS — Global Distribution SystemNetworks like Amadeus, Sabre, and Travelport that distribute rooms to travel agents.
- GLV — Guest Lifetime ValueThe total net profit a guest delivers across the whole relationship — reframing acquisition cost as investment.
- GOPPAR — Gross Operating Profit Per Available RoomThe closest the traditional toolkit gets to profit — whole-property operating profit spread across every available room.
H
L
M
- Market PenetrationHow effectively a hotel captures its share of available market demand.
- Market SegmentationGrouping demand — transient, corporate, group, OTA, direct — to price and forecast each distinctly.
- MLOS — Minimum Length of StayA restriction requiring a minimum number of nights to book a date.
- MPI — Market Penetration IndexYour occupancy share against the competitive set — how well you fill rooms relative to peers.
N
- Net ADRThe realised room rate after the cost of winning the booking — the gap to ADR signals channel and discount health.
- Net RevPARRoom revenue net of channel and commission cost, spread across every available room.
- NRevPAR — Net Revenue Per Available RoomRevPAR after the cost of distribution — a step toward profit, but still before operating cost.
O
- Occupancy %The proportion of available rooms a hotel actually sold — the volume half of RevPAR.
- OTA — Online Travel AgencyThird-party booking platforms that sell rooms in exchange for commission.
- OTA LeakageProfit lost to commission when a hotel rents its own guests back from OTAs.
- OverbookingDeliberately selling beyond physical capacity to offset expected no-shows and cancellations.
P
- PaceThe rate at which bookings accumulate for a future date versus the same point last year.
- PickupThe bookings gained for a target date over a defined period — the momentum of the booking curve.
- Price Elasticity of DemandHow sensitive room demand is to a change in price — the responsiveness behind every pricing decision.
- Profit ArchitectThe evolved revenue-manager role — managing the property to retained profit per room, not revenue.
- ProfitPAR™ — Profit Per Available RoomThe next-generation master metric — the profit each available room actually keeps, after every leak.
R
- Rate FencingRules and restrictions that separate price tiers so segments do not cannibalise one another.
- Rate FloorThe minimum rate below which a booking destroys profit — set by CPOR plus the leaks.
- Rate ParityMaintaining consistent room rates across distribution channels.
- RevPAR — Revenue Per Available RoomThe reigning master metric of hotel performance — the blended revenue earned per available room, whether it sold or not.
- RGI — Revenue Generation IndexYour RevPAR share against the competitive set — 100 means fair share, above means you are winning revenue.