ADR, or Average Daily Rate, is a KPI used to calculate the average price or rate for each hotel room sold for a specific day.

Formula:
Room Revenue / Rooms Sold

Example:
£100,000 revenue / 500 rooms = £200 ADR

Average Length Of Stay (ALOS) This is the average amount of days guests stay in the hotel in a particular period of time.

Formula:
Total occupied room nights / Total bookings

Example:
111 occupied room nights / 37 bookings = 3 ALOS

The meaning of allotment is a block of a certain amount of pre-negotiated rooms which have been bought or held by a third party. This third parties can be online travel agents (OTA), tour operator, travel agents etc.

Artificial intelligence is intelligence displayed by machines, in contrast with the natural intelligence (NI) displayed by humans and other animals. Often defined as the capability of machines to imitate human intelligent behaviour.

BAR is the lowest room rate of a specific day that is available for guests to book. The BAR rates are available to everyone, they do not require prepayment and do not have cancellation or change penalties, other than the hotels standard cancellation policy.

Best Rate Guarantee (BRG) BRG means the promise that the room prices found on the hotel’s website are the best room rates compared to any other websites.

A Booking Curve is a graph that displays bookings over a certain period of time. It includes data like room pickup, bookings, and availability.

Booking restrictions mean that if a guest wants to book a specific period that is high in demand it only allows to book the room if the guest books it for a certain amount of nights.

A boutique hotel is a small and intimate hotel, held in a stylish design decor with a personal note. It has a unique character and distinguishes itself from other hotel brands. It is true to its heritage and is typically situated in a fashionable urban location.

Central Reservation System (CRS) This is a reservation software used to maintain hotel information, room inventory and rates. It main purpose is to manage the reservations and processing it.

A hotel’s capacity is the amount of rooms or guests a hotel can accommodate.

Channel Management refers to the updating of hotel information, room rates and hotel availabilities across all distribution channels. The distribution channels are hotels website, third parties (OTA) and the CRS/GDS. Most hotels use a Channel Management System, which automatically updates all channels when changes are made in the PMS system.

Demand is the level of guests interest in a certain period. In the hospitality industry this could be the demand for family rooms, twin beds, event space etc.

A direct booking is a booking made directly with the hotel. This can be over the phone, email, own website etc. Booking a room on a website of an OTA is not a direct booking since they go through a third party website before the booking reaches the hotel.

Dynamic Pricing simply means that rooms within the same category of a hotel can be sold at different rates at different times. Hotels are doing this to generate more room revenue. When the demand is high rooms rates will go up and when demand is low the room rates will go down. Dynamic pricing can also be done when setting group and corporate rates. Hotels generally have a reservations/revenue manager who looks at this constantly and anticipates on the demand, trends, history etc. of the market.

Hotel market share is a indicator how the hotel is doing in comparison with other hotels in the same market. This means that if you compare the revenue levels with other hotels it will give you the percentage of business the hotel is getting within the hotel market overall. Keynote is to make sure you compare yourself with your comp set to get an accurate number.

Formula:
Revenue sold at the hotel / total revenue within competitive set

Example:
£5000 revenue / £14,500 total revenue = 34% of market share

KPI includes a set of ratios and formulas that help calculate and indicate the performance and progress of a hotel. The most well-known indicators in the hospitality industry are: ADR, REVPAR and occupancy.

LOS means the length of the stay of guests in a hotel. There are different LOS. There is a Average Length Of Stay (ALOS), Minimum Length Of Stay (MinLOS) and Maximum Length Of Stay (MaxLOS).

ALOS is the average amount of days guests stay in the hotel in a particular period of time.

MinLOS is implemented when a hotel is facing a high demand following by a low demand. Example: Weekend (Fri-Sat) booking and Sunday the occupancy is low.

MaxLOS is implemented when a hotel is facing high demand and it wants to limit a low promotional rate to make sure they don’t outbook the potential higher rates.

Similar to a boutique hotel is the lifestyle hotel. Both are unique in their character and very distinctive. A lifestyle hotel distinguishes itself from other hotels by the attributes like: cutting-edge, avant-garde, trendy, funky, charming. It focuses more on a certain lifestyle.

Machine learning is a type of artificial intelligence (AI) that allows software applications to become more accurate in predicting outcomes without being explicitly programmed to do so.

The basic premise of machine learning is to build algorithms that can receive input data and use statistical analysis to predict an output value within an acceptable range.

MaxLOS wordt geïmplementeerd, wanneer het hotel een hoge vraag heeft en een limiet wil op lage promotieprijzen. het wil ervoor wil zorgen dat er een limiet is op lage promotie prijzen. Dit zorgt ervoor, dat er beschikbaarheid is voor potentiele hoge prijzen.

Voorbeeld: Vroegboekkorting in een week waarin ook een groot congres in de stad is.

MinLOS is implemented when a hotel is facing a high demand following by a low demand.

Example:
Weekend (Fri-Sat) booking and Sunday the occupancy is low.

Bedrijven die regelmatig gebruik maken van een hotel willen graag een goedkopere prijs. Hoe vaker een bedrijf het hotel boekt hoe meer gewicht zij kunnen inzetten tijdens de onderhandelingen. Wanneer het hotel en het bedrijf een overeenkomst hebben over de prijs heet dit een negotiated rate.

The net rate is the price without the commission of a travel agent.

A no show is when guests fail to arrive on the date when the booking starts.

OTAs are online companies that allow guests to book travel related services directly on their website. The two most commonly known OTAs are: Booking.com and Expedia.

Occupancy is a hotel KPI calculation that shows the percentage of available rooms or beds being sold for a certain period of time.

Formula:
Rooms Sold / Room Available

Example:
75 rooms sold / 100 rooms available = 75%

When the hotel has allowed itself to receive bookings for more rooms than it actually has.

When it comes to setting prices for rooms, establishing the highest rate is important. A rack rate is the highest rate a hotel asks for a certain room type.

RevPAR, or revenue per available room, is a performance metric in the hotel industry that is calculated by dividing a hotel’s total guest room revenue by the room count and the number of days in the period being measured. TRevPAR is another closely related performance metric in the hotel industry.

Formula:
RevPAR = RoomsRevenue / RoomsAvailable

Example:
£100.000 revenue / 500 rooms = £200,00 ADR

As the name indicates these is managing the hotel’s revenues.

Running a good hotel business does not simply involve selling as many rooms as possible. Excellent hoteliers use dynamic pricing for their revenue strategy. This means selling the right room type, to the right guest, at the right moment, for the right price and on the right distribution channel. This will optimal the room revenue.

A room block refers to a group of rooms reserved for a specific customer. Room blocks are mostly used for conventions and social events or groups in general.

Most hotels do not have one kind of room. They have different categories which again have different prices. Examples are king bedroom, queen bedroom, twin rooms, family room, suite, junior suite etc.

Room pick-up means how many rooms are booked in a certain period of time and/or a certain date. Hotels have pick-up reports that show daily/weekly/monthly pick up results from the hotel.

Everybody would love to say everyone is my target. This sounds amazing but is difficult to manage. Therefore hotel always target a certain area of the market. This does not mean that if you are not from that market you are not welcome. It means that the hotel is using it marketing tools to get the most guests out of that specific market since they believe this is the most valuable to the hotel.

Transient bookings are individual guests who made a booking at the hotel. An example of other types of guests are corporate or group guests.

Yield management is a variable pricing strategy, based on understanding, anticipating and influencing guest behaviour in order to maximise revenue.


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