The hotel industry glossary: Your reference book for technical terms

TREVPAR (Total Revenue per Available Room)
TrevPAR measures total revenue per available room, including income from room rentals, F&B, spa, and other services. This key figure provides a more comprehensive overview of a hotel's earning power, as it takes into account all sources of income.

Formula: TrevPAR = Total hotel revenue/number of rooms available
Formula: TrevPAR = (ADR + additional turnover) * Utilization in %

Cancellation rate
The cancellation rate is the percentage of canceled bookings in relation to the total bookings in a specific period of time. This metric helps to understand guests' cancellation behavior and allows the hotel to make adjustments in pricing and availability strategy to minimize lost revenue.

‍Formula: Cancellation rate = (number of cancellations/ total number of bookings) * 100

ROI (Return on Investment)
The ROI measures the financial return of an investment in relation to the investment costs. In the hotel industry, ROI is used to assess the profitability of expenses, such as marketing campaigns or renovation projects. It shows how efficiently invested capital is being used and helps to make strategic decisions.
Formula: ROI = (income - investment costs)/investment costs * 100

REVPAR
RevPAR shows the turnover per available room and combines the occupancy rate and the average room rate to form a key figure in revenue management. It shows how much revenue a hotel generates per available room and helps to assess its profitability.

‍Formula: RevPAR = ADR * occupancy rate or (total revenue of rooms sold/number of rooms available)

REVPAB
The REVPAB shows the turnover per available bed and is a key figure for evaluating the occupancy and profitability of a hotel on a bed-based basis. It is particularly relevant for hotels that rent out beds individually in addition to rooms, such as hostels.

Formula: REVPAB = net turnover (lodging)/available beds
Formula: RevPab = load x ADR per bed

PUG (hotel price limit)
A hotel's price limit (PUG) is the minimum room rate required to cover costs and avoid losses. It consists of fixed and variable costs per room and serves as a guide for pricing.Formula: PUG = fixed costs/room + variable costs/room

Pickup
Pickup bezeichnet die Anzahl neuer Buchungen oder Reservierungen, die in einem bestimmten Zeitraum für ein zukünftiges Datum hinzugekommen sind. Diese Kennzahl hilft, Trends in der Nachfrage zu erkennen und gibt Einblicke in die Geschwindigkeit, mit der Zimmer für bestimmte Daten verkauft werden. Pickup-Analysen sind entscheidend für das Revenue Management, um Preisstrategien dynamisch anzupassen.

Out of Order (OOO)
Out of order means rooms that are temporarily unavailable, for example due to maintenance, repairs or renovations. These rooms are not included in the calculation of the occupancy rate as they are not available for rent. OOO helps the hotel manage inventory and precisely record the actual room inventory for booking.

On the Books (OTB)
On the Books or Business on Books (BOB) refers to a hotel's current bookings and reservations for a specific period of time. This key figure helps to monitor the current level of occupancy and provides an overview of how many rooms have already been sold. OTB is important for revenue management in order to be able to better plan future demand and pricing strategies.

Occupancy (occupancy rate)
The occupancy rate shows the percentage of occupied rooms in relation to the total number of available rooms. It is an important key figure for evaluating the occupancy rate of a hotel and shows how well capacities are being used.

‍Formula: occupancy rate = (number of occupied rooms/ total number of available rooms) * 100

MST (minimum stay)
MST stands for minimum stay and describes the minimum number of nights that a guest must spend in a hotel when booking. This requirement is often used during periods of high demand or on special occasions to extend the average length of stay and maximize revenue.

MaxStaythrough
MaxStaythrough determines the maximum number of nights that a guest can stay in a hotel when booking, if the booking covers a specific date or period of time. This limit is often used to ensure consistent room availability in times of high demand and to increase the chance of new bookings for subsequent guests.

MinStaythrough
minStaythrough sets the minimum number of nights that a guest must stay in a hotel when booking if the booking covers a specific date or period of time. This requirement is often used to increase the length of stay of guests in times of high demand and thus maximize revenue.

MICE (Meetings, Incentives, Conferences, and Exhibitions)
MICE stands for income from events such as meetings, incentives, conferences and exhibitions. This key figure shows how involved a hotel is in the event and conference business and can be an important revenue factor.

MAXLOS (Maximum Length of Stay)
MaxLos is the maximum length of stay that a hotel sets for a booking. This restriction is often used to ensure the availability of rooms in times of high demand and to ensure that even short-term bookings remain possible.

LRA (Last Room Available)
LRA means the contract clause that allows a customer to book the last available room at an agreed price, regardless of current demand or price situation. This agreement is often used in corporate or group contracts to ensure customers guaranteed access to rooms even during heavy occupancy.

GO (Length of Stay)
Length of stay analysis (LOS - Length of Stay): The length of stay analysis relates to the typical length of time that guests spend in the hotel. This metric helps to understand guests' booking habits and can be used as a basis for pricing decisions, discounts, and stay restrictions to maximize occupancy and revenue.

Hurdle Rate
The hurdle rate is the minimum interest rate or minimum return that an investment must achieve in order to be acceptable. In the hotel industry, the hurdle rate is often used to assess the profitability of investments such as renovations or new projects. It serves as a benchmark and helps to make strategic investment decisions.

House Count
The House Count indicates the number of rooms that can actually be occupied in a hotel at a specific point in time. It is calculated by subtracting from the total number of rooms those that cannot be occupied (so-called Out of Order rooms), for example due to renovations, damage or because they are being used by employees. This metric is critical for planning and resource adjustment, as it reflects the available capacity for guests.

Is the house count = occupancy is the house 100% occupancy

Formula: House Count = Total Room - Out of Order

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)
EBITDA shows operating profit before deduction of interest, taxes, depreciation and amortization. This key figure helps to evaluate the operational performance of a hotel independently of financing and investment decisions.

‍Formula: EBITDA = revenue - operating costs (excluding interest, taxes, depreciation and amortization)

EBIT (Earnings Before Interest and Taxes)
EBIT shows a company's operating profit before interest and taxes are deducted. It is an important key figure for evaluating a hotel's operating performance, as it shows how profitable the core business is regardless of financing or tax aspects. EBIT thus makes it possible to compare operating efficiency with other companies in the sector.

Formula: EBIT = sales - operating costs (excluding interest and taxes)

Conversion rate
The conversion rate measures the percentage of website visitors or potential customers who perform a desired action — such as a booking or an enquiry. It is a key figure for evaluating the effectiveness of marketing measures and shows how successful a hotel is in converting prospects into guests.

Formula: Conversion rate = (number of conversions/number of visitors) * 100

Comp Set (Competitive Set)
Comp Set describes the group of comparable competitors that is used to analyze the market position and performance of a hotel. This comparison group helps to evaluate one's own pricing, occupancy and performance in the context of competition and to adjust revenue management strategies.

Close to Departure (CTD)
Close to Departure is a booking restriction that prevents guests from leaving on certain days. This rule is used to ensure that rooms remain occupied over a desired period of time, particularly during periods of high demand. CTD helps to extend the average length of stay and efficiently manage room occupancy.

Close to Arrival (CTA)
Close to Arrival is a booking restriction that prevents guests from arriving on that day. This rule is often used to promote longer stays, particularly during periods of high demand or special events. The CTA restriction helps to strategically manage occupancy and optimize sales.

BAR Rate (Best Available Rate)
The BAR rate is the best available daily rate that a hotel offers publicly. It serves as a reference price and may vary depending on demand and workload. The BAR rate is often used as a basis for other price offers and reflects the current market value of the rooms.

ALOS (Average Length of Stay)
ALOS is the average length of stay of guests in a hotel. This key figure helps to understand guests' booking behavior and serves as a basis for revenue management and pricing decisions.
Formula: ALOS = total number of nights/total number of bookings

The Average Daily Rate (ADR) is the average room rate that a hotel achieves per occupied room per day. This key figure helps hoteliers analyze their pricing strategy and revenue per room.

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Formula: ADR = room turnover/ occupied rooms