Hotel Terminology Glossary

Plain definitions of the revenue, operations and distribution terms hotel teams use — what each means, how it is calculated, and why it matters.

Revenue

ADR (Average Daily Rate): ADR (Average Daily Rate) is the average price a hotel actually achieved per room sold over a given period. It measures pricing performance on its own, with occupancy deliberately excluded.
ARI (Average Rate Index): ARI (Average Rate Index) compares a hotel’s ADR with the average ADR of its competitive set. An ARI of 100 means the hotel is achieving the market rate; above 100 it is selling at a premium to its competitors.
Comp Set (Competitive Set): A comp set is the group of comparable, competing hotels a property benchmarks itself against — chosen to match on location, segment, quality and the demand they draw from.
GOPPAR (Gross Operating Profit Per Available Room): GOPPAR (Gross Operating Profit Per Available Room) measures gross operating profit for every available room, capturing both revenue performance and how efficiently the hotel is run.
MPI (Market Penetration Index): MPI (Market Penetration Index) compares a hotel’s occupancy rate with the average occupancy of its competitive set. An MPI of 100 means the hotel is filling its fair share of rooms; above 100 it is taking more than its share of demand.
Occupancy Rate: Occupancy rate is the percentage of a hotel’s available rooms that were actually sold in a given period. It measures how much of the inventory the hotel managed to fill, independent of what it charged.
Rack Rate: The rack rate is a hotel’s official published price for a room type before any discount, promotion or negotiated agreement is applied. It is the ceiling from which almost every rate a guest actually pays is discounted.
Revenue Management: Hotel revenue management is the discipline of forecasting demand and setting prices, availability and distribution so a hotel earns as much as possible from a fixed, perishable inventory of rooms — selling the right room to the right guest at the right price, at the right time, through the right channel.
RevPAR (Revenue Per Available Room): RevPAR (Revenue Per Available Room) measures how much room revenue a hotel earns for every room it has available, whether or not that room was sold. It combines rate and occupancy into a single number, which is why it is the most widely used performance metric in hotel revenue management.
RGI (Revenue Generation Index): RGI (Revenue Generation Index) compares a hotel’s RevPAR with the average RevPAR of its competitive set. An RGI of 100 means the hotel is earning exactly its fair share of room revenue; above 100 it is outperforming the set, and below 100 it is losing share.
TRevPAR (Total Revenue Per Available Room): TRevPAR (Total Revenue Per Available Room) measures all revenue a hotel earns per available room — rooms, food and beverage, spa, events and any other outlet — not just the room rate.
Yield Management: Yield management is the practice of continuously adjusting room rates and availability by segment and channel to extract the most revenue from a fixed, perishable inventory of rooms.

Operations

CPOR (Cost Per Occupied Room): CPOR (Cost Per Occupied Room) is the average cost of servicing each room sold: the rooms department’s operating costs divided by the number of occupied rooms. It measures how efficiently a hotel turns rooms, independent of what it charges for them.
Hotel Folio: A hotel folio is the itemised account held against a guest’s stay, recording every charge and payment — room, tax, food and beverage, and incidentals — from check-in through to final settlement.
Night Audit: The night audit is the daily close of a hotel’s books, run overnight, which reconciles the day’s transactions, posts room and tax charges, and rolls the property into the next business day.
Property Management System (PMS): A property management system (PMS) is the core operational software of a hotel. It holds the reservations, room inventory and guest folios, and runs the front-desk workflow — check-in, room assignment, housekeeping status, billing and the night audit.
Rooming List: A rooming list is the roster a group organiser sends a hotel naming every guest in the block, along with arrival and departure dates, room type and sharing arrangements, so the hotel can assign rooms before arrival.
Run of House (ROH): Run of house (ROH) is a rate sold without a guaranteed room type: the guest books at a single price and the hotel assigns whichever room is available at check-in, at or above the standard category.

Distribution

Central Reservation System (CRS): A central reservation system (CRS) is the platform that holds a hotel or group’s rates, inventory and reservations centrally, and serves them out to every booking channel from one place.
Channel Manager: A channel manager is the software that distributes a hotel’s rates and availability to every booking channel and pulls reservations back, keeping inventory synchronised so the same room is never sold twice.
Global Distribution System (GDS): A global distribution system (GDS) is a network that connects travel agents and travel management companies to airline, hotel and car-rental inventory so they can see rates and book in real time. The three major GDSs are Amadeus, Sabre and Travelport.
Online Travel Agency (OTA): An online travel agency (OTA) is a website or app that sells hotel rooms and other travel on behalf of suppliers — Booking.com, Expedia, Agoda and Trip.com are the largest. Hotels pay the OTA a commission on each booking in exchange for the demand it brings.
Rate Parity: Rate parity is the practice of publishing the same room rate for the same room, dates and conditions across every distribution channel — the hotel’s own site, OTAs and other partners.

Guest

MICE (Meetings, Incentives, Conferences and Exhibitions): MICE stands for Meetings, Incentives, Conferences and Exhibitions — the business-events segment of hospitality, covering group travel organised around a professional purpose rather than leisure.
Turndown Service: Turndown service is a second, evening housekeeping visit that prepares the room for sleep — turning back the bed linen, drawing curtains, adjusting lighting and refreshing the bathroom.

Property

Full-Service Hotel: A full-service hotel offers a complete range of guest services beyond the room — typically a restaurant and bar, room service, meeting and event space, and staffed services such as a concierge and bell desk.
Hotel Asset Management: Hotel asset management is the practice of managing a hotel as an investment on behalf of its owner — overseeing the operator, capital spending and strategy so the property delivers the best possible return over the ownership period.
Independent Hotel: An independent hotel is a property that operates without a hotel brand: it is not part of a chain and does not carry a brand name under a franchise or management agreement. It sets its own standards, identity and distribution strategy.
Limited-Service Hotel: A limited-service hotel focuses on the room itself and offers few amenities beyond it — typically no full restaurant or room service, and at most a breakfast area, a small shop and little or no meeting space.