Revenue Glossary

👉 The bookings that have come in since the last time you checked. 📘 What is Pickup? Pickup measures the number of bookings, room nights, guests or revenue added over a specific period of time. It is one of the most widely used Revenue Management metrics because it shows how

Property Management System — A Hotel Management System technology. 📊 What is a PMS? A PMS (Property Management System) is the core operational software of a hotel. It handles everything from guest arrivals and departures to room allocation, billing, housekeeping status, reporting and integrations with other systems like channel managers,

👉 The true margin that ends up “in your pocket” after deducting discounts, commissions, and variable costs. 📘 What is Pocket Margin? It is the effective profit per booking after removing all direct booking-related costs. ✅ Why is Pocket Margin important? Because it reveals the true profitability of each channel

Positioning of a hotel in the market. 📊 What is hotel positioning? Positioning refers to how your hotel is perceived by potential guests in relation to other accommodations. It’s not just about price, star rating or location — it also involves your online reputation, perceived quality, design, services, reviews, and

Hotel market positioning. 👉 The place your hotel occupies in the guest’s mind compared to alternative options. 📊 What is hotel positioning? Positioning refers to how your hotel is perceived by potential guests in relation to other accommodations. It’s not just about price, star rating or location — it also

👉 The strategy and process of setting room rates to optimise revenue based on market demand, competition, and other factors. Pricing strategy is more than just numbers: it’s about understanding the market, demand, and your guest to maximise revenue. 📊 What is pricing? Pricing refers to determining the right room

Actual profit per channel – not just sales numbers. 👉 Which one’s bringing you real cash, not just bookings?

(PMS). Software used to manage hotel operations like check-in, billing, housekeeping, etc.👉 The ‘operational brain’ of the hotel.

Official public room rates without any discounts. 👉 The “list price” that no reseller usually pays.

What is Rate Fencing? The rate fencing It is a Revenue Management tactic that sets conditions or “fences” to control access to specific rates. Fences can be physical (room type, view, package) or non-physical (cancellation policy, advance purchase, minimum length of stay). The aim is to offer differentiated prices in

Keeping your prices the same across all channels. 👉 What you try to avoid to stop losing margin for no good reason.

📊 What is Rate Shopping? Rate Shopping is the process of collecting and comparing room rates from competitor hotels (your compset) across OTAs, brand.com, and other channels. This is usually done using automated tools called rate shoppers. ✅ Why is it important? 📘 Practical example of Rate Shopping If your

(Returning blocked rooms to general inventory) 📊 What is Release? In hospitality, a release refers to the act of freeing up blocked rooms (for a group, agency or wholesaler) that haven’t been confirmed by the cut-off date. Once released, these rooms go back to the hotel’s general inventory, allowing them

👉 The rules of the game for booking rooms. 📘 What are Restrictions? Restrictions in hospitality are conditions that limit or control room bookings, aiming to optimise revenue and manage occupancy. ✅ Why are Restrictions important? Because they allow the hotel to control occupancy and maximise profitability: 💡 Practical example

👉 Income generated solely from the sale of hotel rooms. 📊 What is Revenue? Revenue is the total money earned from rooms sold over a specific period, excluding other sources like food or events. 🧮 Revenue Formula Revenue = Average Daily Rate (ADR) × Number of rooms sold ✅ Importance

Definition Revenue criteria refers to the set of principles, decision logic and rules that guide how a hotel adjusts its pricing, availability and distribution strategy based on demand, context and revenue goals. It is not a tool or a standalone metric — it’s how the hotel interprets data and decides

👉 The strategic process of optimising a hotel’s revenue by managing pricing, distribution, and availability. 📊 What is Revenue Management? Revenue Management uses data analysis and strategies to sell the right room, to the right customer, at the right price, at the right time to maximise total hotel revenue. 🧮

👉 It’s not just about selling more — it’s about earning smarter. 📘 What is Revenue Optimisation? Revenue Optimisation is the strategic process of maximising a hotel’s profitability by balancing pricing, demand, distribution, guest value and operational efficiency. Rather than focusing solely on room sales, it aims to extract more

👉 How much value each guest truly generates. 📘 What is Revenue per Guest (RevPG)? Revenue per Guest (RevPG) measures the average total revenue generated by each guest throughout their interaction with the hotel. Unlike room-focused KPIs, RevPG evaluates the guest’s complete economic value, including: It is particularly useful for

(RPO) Total revenue divided by the number of occupied rooms. .Formula: Total Revenue / Occupied Rooms.

👉 Revenue doesn’t end once the booking is made. 📘 What is Revenue Post-Booking? Revenue Post-Booking is the strategy of generating additional revenue after the guest has already confirmed their initial reservation. Its purpose is to increase the total booking value through: This approach turns an already secured booking into

Definition Revenue strategy is the overall approach that defines how a hotel wants to position itself in the market and which revenue goals it aims to achieve. It sets priorities across pricing, segmentation, distribution channels and demand mix. Why it matters A clear revenue strategy helps hotels to: Without a

👉 Looking upwards to understand where you want to compete. 📘 What is a Reverse Compset? A Reverse Compset is a competitive set made up of higher-positioned hotels used as aspirational references within a revenue, pricing or repositioning strategy. Instead of analysing only direct competitors, a Reverse Compset aims to

👉 How much revenue each available square metre actually generates. 📘 What is RevPAM? RevPAM (Revenue per Available Metre) is a metric that measures the revenue generated per available square metre within a hotel. Unlike room-based KPIs, RevPAM focuses on the profitability of physical space, including areas such as: It

(Revenue per Available Room) Average income per available room – it’s ADR × Occupancy. 👉 Tells you how well your rooms are really performing, booked or not.

📘 What is RevPASH? RevPASH measures the revenue generated per available seat per hour. It’s particularly useful in food and beverage (F&B) operations, helping assess the performance of dining areas in terms of occupancy and turnover. ✅ Why is it important? 🧮 Formula RevPASH = Total revenue / (Available seats

Definition Return on Investment (ROI) measures the profitability of an action or investment relative to its cost. It is used to assess whether a decision (technology, campaign, channel, etc.) delivers value compared to what was invested. Formula ROI=Profit−InvestmentInvestmentROI = \frac{Profit – Investment}{Investment}ROI=InvestmentProfit−Investment​ Why it matters ROI helps hotels to: Not

👉 The more, the better… as long as they’re controlled. 📘 What are Sales Channels? Sales Channels are the different platforms and intermediaries through which a hotel sells its rooms and services. These may include: They shape how and where your inventory reaches the market. 📊 Formula of Sales Channels

(Retroactive volume-based discount or bonus) 👉 A smart incentive that rewards sales performance. 📊 What is a Sales Rappel? In the hotel industry (and in business more broadly), a sales rappel is a retroactive discount or bonus granted when a client (such as an agency, company, or tour operator) reaches

Fluctuations in demand depending on the season or time of year. 👉 You don’t sell the same in August as in January.

📘 What is Semi-flexible?A rate that allows cancellation with a partial penalty. 📊 FormulaPenalty (%) applied to the total amount. It is recommended to implement a semi-flexible rate as a middle-ground option within the pricing strategy, especially during periods of medium or variable demand. This rate helps balance booking acquisition

Definition Shadow pricing is an analytical technique where alternative pricing scenarios are simulated without being applied live, in order to assess their potential impact on demand or revenue. It allows hotels to “test” pricing decisions without directly affecting the market. Why it matters Shadow pricing helps to: It enables forward-thinking

Strategic planning of staff based on expected occupancy. 👉 How many people do you need today at reception or in flats according to your reservations.

🔄 What is Stay Frequency? Stay Frequency measures how many times, on average, a guest stays at the hotel during a specific period (e.g., one year). It is particularly useful to assess active loyalty and engagement from returning customers. 👉 Stay Frequency formula Stay Frequency=Total number of stays by returning

👉 Switching off without travelling too far. 📘 What is a Staycation? The term Staycation combines stay and vacation, referring to leisure trips or short breaks taken close to the traveller’s usual place of residence. In hospitality, staycations are often linked to: This type of demand became especially relevant after

📘 What is it?Closing sales for a specific channel or rate. 📊 FormulaNot applicable. ✅ Why is it important?Controls distribution.Avoids dependency on channels. 💡 ExampleClosing OTA sales on key dates. 🔄 Disambiguationvs Closed Out → it is not a total closure.In short: strategic, not absolute closure. 👉 Stop selling —

What is Sustainable Ancillary Revenue Share?❓ Sustainable Ancillary Revenue Share is the percentage of ancillary revenue (F&B, upselling, experiences, wellness…) that comes from sustainable options. 👉 It shows whether sustainability is profitable beyond the room. Formula of Sustainable Ancillary Revenue Share 🧮 Sustainable Ancillary Revenue Share = Sustainable ancillary revenue

All income generated by the hotel: Rooms + F&B (Food & Beverage) + Extras + Other Services. 👉 Everything that goes in the box, not just for sleeping.

Total income from all sources, per available room 📊 What is TRevPAR? TRevPAR stands for Total Revenue per Available Room. It measures the total revenue (rooms, F&B, spa, parking, etc.) generated per available room in a given period. 🧮 Formula Trevpar = Total Income / Rooms Available ✅ Why is

👉 Wholesale travel company that sells holiday packages to travel agencies. 📘 What is a Tour Operator? A tour operator buys hotel rooms and services in bulk to create travel packages sold via agencies. ✅ Why is it important? It provides volume and demand stability, especially in leisure destinations. 💡

👉 Companies that coordinate complete travel experiences. 📘 What are Tour Organisers? Tour Organisers are companies that arrange and coordinate travel services for groups or individuals, often bundling accommodation, transport and activities. 📊 Formula of Tour Organisers No mathematical formula — performance is measured via contracted volume and revenue contribution.

Definition Travel window refers to the period during which a guest can stay as part of an offer, promotion or demand analysis. It should not be confused with the booking window, as it relates to when the stay happens, not when the booking is made. Why it matters Understanding the

📘 What is TRevPOR? TRevPOR (Total Revenue per Occupied Room) measures the total revenue generated by each occupied room during a specific period. Unlike room-only KPIs, TRevPOR includes all revenue streams associated with the guest stay, such as: As a result, it provides a broader view of how effectively a

👉 When you predicted less demand than what actually arrived. 📘 What is Underforecast? Actual demand is higher than predicted demand. ✅ Why is it important? It often leads to underpricing and operational stress. 💡 Practical example Forecast: 60 %Actual: 85 %Underforecast = 25 points. 🔄 Disambiguation The opposite of

Encouraging guests to upgrade to higher-value products. 👉 “Do you want a room with a view for only €20 more?”

👉 When the hotel can’t accommodate the guest… and must relocate them elsewhere. 📘 What is Walking or a Walked Guest? A walked guest is a guest who, despite having a confirmed reservation, cannot ultimately stay at the hotel and must be relocated to another property due to an oversale

👉 Percentage estimate of bookings that will not convert into actual stays (due to cancellations, no-shows, or early departures). 📘 What is the Wash Factor? The Wash Factor, also known as the cancellation factor, is the estimated percentage of reservations that will not materialise. It accounts for guest behaviour like

📖 ¿What is Yield? Yield refers to the revenue generated from room sales compared to the hotel’s maximum potential revenue. Yield Management is the tactical practice of adjusting prices and availability based on demand to maximise room revenue. 📐 Formula Yield (%) = (Actual Revenue / Maximum Potential Revenue) ×