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Hotel Industry Jargons & Terminologies- Trilyo

RevPAR..GOPPAR?! What in the world is that? Image Source: https://goo.gl/uX3ELz

 
The hospitality industry is made of numerous players including suppliers, hotels, and planners. Each field has its own “lingo” that the other players are not aware of, but works together with the common goal of boosting business in terms of revenue and sales. Further, if you want to start a hospitality business of your own or want to work in a hotel business, speaking the professional hotel ‘lingo’ is an absolute must.

To successfully conduct business, a mutual understanding of vocabulary is essential. Trilyo compiles this handy hotel jargon buster which will help you get there with a list of 21 essential words most commonly used in the hospitality industry.

ADR

Average Daily Rate is one of the primary parameters of a hotel’s income. It is the revenue generated by the income from hotel rooms sold, divided by the total number of rooms sold.

Allocation

As the name suggests, it refers to ‘allocation of rooms’ (e.g a conference or event may have an allocation of rooms at an agreed rate)

Alternative Availability

When a particular requested property is unavailable for sale, other available properties are displayed which is termed as Alternative Availability.

ARR

Average Room Rate is the total room revenues divided by the number of rooms occupied, excluding any rooms offered as complimentary

Chatbots

A Chat what?!

Also known as a chatterbot, talkbot, an artificial intelligence conversational entity, a chatbot is a service that mimics human behavior. But what does it have to do with a hotel, when there is already enough staff employed for guest service? Here are 6 Reasons why you should implement Chatbots for your Hotel. You can also try out one for your hotel, for free here.

Trilyo’s 24x7 live chat support uses everyday messaging platforms to answer guest queries and more.

CMS

Content Management System keeps your hotel website upto date. Its main function is to keep track of contracts and agreements.

Read about 6 Tips to Create an Impressive Website for your Hotel from an already existing one.

CRM

Customer Relationship Management is automated communications (pre and post stay) for guests along with loyalty programmes. It is the best way to make your services stand out by using information of guests to discover the best practices for retaining business.

FIT

Free Independent Traveler or Frequent Individual Traveler are individual tourists travelling independently, designing their own itinerary and making their own travel arrangements without being part of any group or imposed schedule.

Here’s a secret. FITs usually have a higher than average daily spend than their counterparts who travel in groups. (Shhh!)

GDS

Global Distribution System is a large computer network that passes inventory and rates for hotels to travel agents and travel sites (or what we know as OTAs).

GOP

It is a KPI (Key Performance Indicator) which refers to the hotel’s profits after subtracting all of their operating expenses. Gross Operating Profit illustrates the level of operational profitability of a hotel. In simple terms — gross revenue minus expenses.

GOPPAR

An abbreviation for Gross Operating Profit Per Available Room is another key performance indicator for the hotel which aids hoteliers in analyzing the results of cost-saving measures. It is calculated as the total revenue of the hotel minus the expenses incurred earning that revenue, divided by the available rooms.

IDS

The Internet Distribution System offers technology that lets travelers research, plan and book their travel needs from a wide selection of partners and agencies. It allows the travel suppliers to change offers quickly so customers may find great last minute deals to purchase.

Loyalty Programme

A rewards programme for the regulars. For instance, vouchers, room upgrades etc.

MOD

Manager on Duty, the ‘main’ guy looking after the smooth running of the hotel operations.

OTA

The relationship between a hotel and Online Travel Agencies is much debated. Are OTAs and hotels friends, enemies or frenemies?

Well, what we do know is that OTAs are a 3rd party who often sell a hotel’s room inventory on their behalf in exchange for a commission fee. Examples of some of the main OTA’s include Expedia, Booking.com, Priceline etc. But the big question is - What Generates More Money for Hotels: Direct Discounts or OTA Bookings?

 
Offering a discount of 15% on direct booking generates more money than booking with OTAs

Pax

In a hotel it refers to “No. of Guests”. You might come across terms such as 1000 Pax Wedding, 20 Pax Restaurant Reservation, 03 Pax per room pertaining to the number of people involved in each case.

PMS

PMS or Property Management System is essentially a software that manages the operating activities of the hotel and oversees and coordinates the relationship with the customer and services. To give you a head start, Hotelogix is one such great PMS which is fast, easy and simple.

To manage online booking, reservation management, housekeeping and Front Desk, 34% of hoteliers use property management software while 25% use pen and paper, 9% use reservation software alone, 8% use custom-built software and 16% have no system in place.

PRPN

Per Room, Per Night. Well, this one was easy!

Rack Rate

This one’s a big one.

Let’s admit it, every hotel sets its own rates and its own rules to add discounts on those rates. Simply put, the standard or asking price for a room, before any discounts are applied is termed as rack rate.

RevPAR

Revenue Per Available Room is the total cost of the guest room divided by the number of available rooms in the hotel.

Quick Tip! RevPAR is affected by the number of vacant rooms but ADR shows only the average rate of rooms that are actually sold. RevPAR gives you a more precise and broad picture of the hotel’s performance against your competitors in the market.

Yield Management or Revenue Management

Often, a hotel has to raise or lower prices based on demand. The key to successfully carry out this practice is to sell the right product (like guestrooms, banquets etc.) to the right customer or for the right purpose (such as business, leisure, government etc.) on the right day (weekdays or weekend) for the right price (corporate rate, rack rate,or any other special rate).

There are so many other terms used in the ‘Hotel lingo’ which puzzle us everyday. The jargons listed above are some most commonly used. With these at your aid, you’re ready to dive in and speak the hotelier’s lingo!

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About Author

Ankur Chowdhury
Ankur Chowdhury

A passionate writer who loves to develop meaningful and informative content with deep research and analysis. I have been a blogger and a writer for the past 3.5 years. I consider this as my passion and I really love it. Daily, I spend hours of time in writing. Blogging helps to enhance my knowledge in various fields. I am a full-time blogger at Trilyo.

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