There is an abundance of specialized terminology, numerous abbreviations and various acronyms in the hotel industry. Are you wondering about their meanings?

Allow our extensive glossary to navigate you through the world of hotel industry and hotel financial planning jargon.


The management of a business’s assets to ensure they are being used efficiently and to maximize returns.

An index that measures a hotel’s rate against its market. Above 100 indicates a hotel’s rates on average are higher than its competitors.

A metric that represents the average rate paid per occupied room or unit during a given period, calculated by dividing the total room revenue by the number of occupied rooms.

A metric that represents the average number of nights a guest stays at a hotel or other hospitality business during a given period.

A metric that represents the average rate charged for all rooms, whether occupied or not, during a given period, calculated by dividing the total room revenue by the total number of rooms.


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.

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

The process of creating a financial plan for a specific period, often a year, to estimate revenue, expenses, and cash flows.

The use of data analysis tools to provide insights into business performance and inform decision-making.

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


The monitoring and management of cash inflows and outflows to ensure sufficient funds are available to meet financial obligations.

The management of expenses to ensure they remain within a set budget, often achieved through reducing waste and improving efficiency.


The monitoring and control of expenses to ensure efficient use of resources and cost savings.


The generation and distribution of financial information about a business, including balance sheets, income statements, and cash flow statements.

The process of predicting future financial performance based on past data and trends.

The department responsible for providing food and drinks to guests.


The profit earned by a hospitality business before deducting fixed expenses, such as rent and taxes.


The optimization of labor resources, including scheduling, training, and compensation.


The profit earned by a hospitality business after deducting fixed expenses, such as rent and taxes.


Key performance indicators (KPIs) that measure the success of a business, such as revenue per available room (RevPAR) and average daily rate (ADR) in the hospitality industry.

The assessment of a business’s profitability by analysing revenues and expenses and identifying areas where improvements can be made.

A software system used by hospitality businesses to manage their operations, including reservations, room assignments, billing, and reporting.


The optimization of revenue through pricing, inventory control, and demand forecasting.

A software system used by hotels and other hospitality businesses to analyse data and optimize pricing and inventory in order to maximize revenue. An RMS helps hospitality businesses to forecast demand, set prices, and allocate inventory across different channels, such as online travel agencies and direct booking channels.

A metric that represents the total revenue earned from room sales divided by the number of available rooms during a given period, often used to measure a hotel’s overall performance.


A comparison used to measure changes in a business’s performance over time, by comparing current performance to performance during the same period in a previous year.


The comparison of actual financial performance to budgeted or forecasted performance, to identify discrepancies and make necessary adjustments.

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