So much jargon, so many acronyms. What does it all mean?

Use our quick glossary of revenue management terms to help refresh your memory.

A

Analytical Market Segmentation

A rule-based process used to create optimal revenue management segmentation from reservation data to support both the best basis for forecast and optimization and key organizational reporting and business intelligence requirements.

Average Daily Rate (ADR)

Average Daily Rate = Actual daily room revenue / total rooms Sold.

Average Room Rate

An alternative term for Average Daily Rate (ADR).


B

Best Available Rate (BAR)

The lowest non-restricted rate bookable by all guests. This rate can change several times a week and up to several times a day.

Booking Pace

The speed at which bookings materialize over a period of time from the booking date to the arrival date. Booking pace is expressed as a fraction of bookings received on certain days in advance.

Business Mix

The blend of different market segments that occupy a hotel, measured as a value or percent of occupancy.

Business Type

A market segment description of either Group or Transient. The system’s analytics need to understand what business type the market segment belongs to in order to know if bookings are expected all at once or one by one.


 C

Channel Management (CM)

Provides a way for hotels to control the allocation of hotel inventory and rates across all distribution channels including websites, third parties and the GDS.

Competitive Set

Comparable hotels in a hotel’s vicinity that compete for guests.

Constrained Demand

The quantity of rooms that are expected to be sold for a date. Considers limitations such as a hotel’s capacity or restrictions on bookings.

Cost of Walk (COW)

The cost of turning away a guest when the hotel is unable to provide the promised accommodation, which may include the cost of a hotel room, complimentary gifts, and probable lost future business.


D – E

Day Parts

Practice of dividing the day into several parts, in which a different meeting or event can be accommodated in a function space (morning, lunch, afternoon, evening, etc.).

Days to Arrival

The number of days prior to an Arrival Date, used to measure information such as a booking pace, hotel performance and forecast performance.

Demand

The business that the system anticipates for future days.

Displacement Analysis

An analysis of business (primarily Group) that is based on the total value of the business versus the value of the transient business that would be displaced if the business were accepted.


F

Fenced

Rates that a hotel uses to provide a series of options to guests. The rate is determined by which fences a guest accepts, which might include nonrefundable and non-cancelable reservations, advanced purchase reservations, and staying over a weekend.

Forecast – Group

Group occupancy that is anticipated by the system.

Forecast – Transient

Transient occupancy that is anticipated by the system.

Forecasting Model

The statistical patterns used for predicting demand, occupancy and revenue.

Free Sell

Function-Only Business restrictions or Event-Only Business restrictions are guidelines put in place at the hotel to ensure space is available for groups within their typical booking window.

Full Pattern Length of Stay (FPLOS)

A pattern indicating whether a rate is open (available) for the arrival date and length of stay.


G – H

Global Distribution System (GDS)

Comprehensive travel shopping and reservation platforms that travel agents use to book airline, car, hotel and other travel arrangements for their customers.

Group Demand

The group business expected for an occupancy date.

Group Pricing Evaluation

A system tool that allows users to enter details about a potential group booking, generate an analysis, and use the resulting data to select the best arrival date and rate that will provide the highest benefit to the hotel.

Group Wash

The difference between the final occupancy from a group and the maximum value of the block pace or the pickup pace.

Group Wash by Group

A system feature that provides group business data, including occupancy date, blocked rooms and expected wash, and is also the location from which users can override the system-generated group wash.


I – K

KPI

Key Performance Indicators, for example: Average Daily Rate (ADR), Revenue per Available Room (RevPAR), Occupancy rate, Profits per Available Space Time (ProPAST), Profits per Occupied Space Time (ProPOST) and Function Space Utilization Percentage.


L

Last Room Value (LRV)

The maximum amount of room revenue that a hotel can expect to make from the last room available for sale. The system uses the Last Room Value as a restriction control for low value rates during busy periods and opens all rates during slow times.

Length of Stay (LOS)

The number of nights that a guest stays at a hotel. This value is also the difference between the departure date and the arrival date.


 M

Market Segment (MS)

A portion of the customers who possess a common set of motivations as well as a combination of unique purchasing (e.g., advance purchase vs. walk-in) and usage patterns (e.g., single night vs. weekly).

Market Segment Group (MSG)

Market segments that are grouped together by pattern and rate.

Maximum Length of Stay (Max LOS)

A room inventory control function that limits the number of nights a reservation can stay when arriving on a certain date.

MICE

Acronym used in S&C/Function Space for Meetings, Incentives, Conference & Exhibitions.

Minimum Acceptable Rate (MAR)

The lowest acceptable amount that a group can be charged, used to calculate the suggested group rate.

Minimum Length of Stay (Min LOS)

A room inventory control function that requires a reservation to meet or exceed a certain length of stay in order to complete the reservation.


N

New Hotel Service Success Package (NHSSP)

A service offered by IDeaS to new hotels using Revenue Management System or Forecasting Management System to begin applying analytics as quickly as possible when the historical data required to build the system is not available.

No-Show

The case where some customers with a reservation do not show up to use the room(s) reserved for them, without explicit cancellation.


O

Occupancy (Occ)

The “fill” measure of a hotel. Occupancy = total number of rooms occupied / total number of rooms available x 100 (e.g., 75% occupancy).

Occupancy Forecast

The constrained occupancy that the hotel is expected to achieve for a specified period of time. This value may be expressed either as a specific number of rooms or as a percentage of available rooms.

Optimization

The use of forecast information, property inventory information, rate information, configuration information, and user interaction to calculate the best pricing and control decisions for a hotel. BAR pricing, Last Room Value, forecasts and overbooking are the end result of the optimization process.

Overbooking

The practice of selling more rooms than are physically present in the hotel to account for cancellations and no-shows. The goal of overbooking is to maximize revenue by achieving as close to 100% occupancy as possible on any given day.


 P

ProPAST

Profit per AVAILABLE space time (or meal period).

ProPOST

Profit per OCCUPIED space time (or meal period).


Q

Qualified Rate

A rate that the guest must qualify for: a corporate rate for the guest’s company, a rate available due to an affiliation such as AARP, a promotional package rate with specific booking conditions, etc.


R

Remaining Demand

The system-calculated remaining unconstrained demand for an arrival date in the future, as of the processing date.

Reputation Integration

Data feed received from online reputation management providers for a hotel’s online reputation performance, in a certain market.

Reputation Pricing

Pricing science that integrates a hotel’s online reputation, guest reviews and ratings into its revenue management strategy.

Revenue Generated Index

An index that measures a hotel’s revenue share in its market.

Revenue Management System

The software application that hotels use to control the supply and price of their inventory in order to achieve maximum revenue or profit, by managing availability, room types, stay patterns (future and historical), etc. 

Revenue Optimization

A business discipline and culture that focuses on balancing supply and demand in a rational and systematic way to maximize revenue and profit while managing risk under current and anticipated market conditions.

Revenue per Available Room (RevPAR)

RevPar = daily room revenue / total rooms available.

Room Block

A group of rooms that may be created to organize rooms to aid in planning, sales or other management tasks. Examples include associating rooms with a single fixed price, a single guest, a channel, a group or a single team of staff members that manage or maintain the rooms in the block.

Room Class

Categories that are used to group room types with similar values.

Room Nights

Room Nights = rooms blocked or occupied multiplied by the number of nights each room is reserved or occupied.

Room Type

A collection of rooms sharing a common element at the hotel. A Room Type might be a suite or a single room with a double bed, poolside or ocean-side. A room may belong to multiple Room Types.


S

Semi-Yieldable Rates

Rates that can be closed but only when the same room type or length of stay is closed for BAR; for example, Last Room Available accounts.

Shoulder Nights

Nights of less occupancy on either side of peak nights.

Special Event

A date or set of contiguous dates for which the hotel data cannot be forecasted in the normal fashion, or period(s) where the transient business pattern is different than normal.

System BAR

The BAR decision selected by the IDeaS system for an occupancy date.

System Override

A user-selected value that replaces the demand value calculated by the system.


T

Total Revenue Performance

The intelligent calibration of demand across all hotel functions to meet overall business objectives. It is the ability to instantly and systematically decide which business to accept across multiple revenue streams at all times, based on greatest overall value to the asset.

Transient Business

Guests who book individually rather than with a group.

Transient Demand

The anticipated volume of business from transient market segment groups.


U – V

Unconstrained Demand

Demand that is not constrained by the capacity or restrictions of the hotel and could be sold if the hotel had an unlimited number of rooms available to sell. Also called True Demand.

Unqualified Rates

Rates that are offered by the hotel to guests who do not have an agreed contract rate and that have no restrictions or booking conditions attached to them.

Utilization (Function Space)

Calculated by multiplying the available area by the number of day parts being evaluated.


W

Wash

The difference between the group block and what the hotel expects it will actually pick up.

Web BAR

An enhanced BAR outcome that considers competitive rate data in the calculation of Best Available Rate.

Web Rate Competitor

A hotel’s defined competitors for which rates are supplied by an Internet-based rate shopping service and whose rates impact Web BAR. 

Web Rate Shopping

An Internet-based service that supplies competitor rate data to hotels.


X – Z

Yield Management

Set of strategies that help realize optimal revenues for capacity-constrained resources. The core concept of yield management is to provide the right service to the right customer at the right time for the right price – by understanding, anticipating and influencing consumer behavior.