CHIA flashcards
CHIA · Build recall with a focused review session.
32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Occupancy rate formula
- Occupancy equals rooms sold divided by rooms available for the same period; rooms available normally equals total rooms minus out-of-order rooms.
- Average daily rate formula
- Average daily rate equals rooms revenue divided by rooms sold; use paid rooms and room revenue only so the result is not distorted by complimentary stays.
- RevPAR formula
- Revenue per available room equals rooms revenue divided by rooms available, and also equals occupancy rate multiplied by average daily rate.
- TRevPAR definition
- Total revenue per available room equals total hotel revenue, including rooms, food and beverage, and other revenue, divided by rooms available.
- GOPPAR definition
- Gross operating profit per available room equals gross operating profit divided by rooms available; it measures profit after departmental and undistributed operating expenses.
- Available room nights
- Available room nights equal number of rooms multiplied by number of days, minus room nights taken out of service for maintenance or renovation.
- Occupancy index
- Occupancy index equals subject hotel occupancy divided by competitive set occupancy, multiplied by 100; above 100 indicates occupancy penetration above the comp set.
- RevPAR index
- RevPAR index equals subject hotel RevPAR divided by competitive set RevPAR, multiplied by 100; it is also called revenue generating index.
- Booking curve
- A booking curve shows cumulative reservations on hand by lead time before arrival; comparing curves reveals changes in pace and demand timing.
- Pickup
- Pickup is the net increase in reservations since a prior forecast or date, calculated as new bookings minus cancellations and no-shows.
- Price elasticity
- Price elasticity of demand equals percentage change in quantity demanded divided by percentage change in price; absolute values below one indicate inelastic demand.
- Displacement analysis
- Displacement analysis compares revenue from a proposed group with revenue lost from transient guests who would be turned away, including ancillary and cost effects.
- Hurdle rate
- The hurdle rate is the minimum room rate or total contribution needed to justify accepting a booking after considering displaced business and incremental costs.
- Overbooking
- Overbooking sets reservation limits above physical capacity to offset expected cancellations and no-shows, balancing walk costs against revenue from filled rooms.
- Net ADR
- Net average daily rate equals gross room rate minus distribution costs such as travel agency commissions and channel fees, expressed per occupied room.
- Length-of-stay control
- Minimum length of stay requires a booking to cover a specified number of nights, helping reduce orphan nights and protect high-demand dates.
- Departmental profit
- Departmental profit equals departmental revenue minus cost of sales, labor, and other departmental expenses; it excludes undistributed operating expenses and fixed charges.
- GOP formula
- Gross operating profit equals total revenue minus departmental expenses and undistributed operating expenses; it is before management fees, fixed charges, depreciation, and interest.
- Hotel EBITDA
- EBITDA equals gross operating profit minus management fees, fixed charges, and rent; it is before depreciation, interest, and income taxes.
- Budget variance
- Budget variance equals actual result minus budgeted result; a revenue variance above budget is favorable, while an expense variance above budget is unfavorable.
- Flow-through
- Flow-through equals change in gross operating profit divided by change in revenue; it shows the percentage of incremental revenue converted into profit.
- Breakeven occupancy
- Breakeven occupancy equals fixed costs divided by the product of rooms available and contribution margin per occupied room, where contribution margin equals ADR minus variable cost per room.
- Cost per occupied room
- Cost per occupied room equals a cost category, often rooms labor or rooms expense, divided by occupied rooms for the same period.
- DSCR
- Debt service coverage ratio equals net operating income divided by annual debt service; lenders use it to assess ability to cover principal and interest.
- Competitive set
- A competitive set is a group of hotels that compete for the same demand in a market; it should be stable, relevant, and representative for benchmarking.
- MPI
- Market penetration index equals subject hotel occupancy divided by competitive set occupancy, multiplied by 100; values above 100 indicate above-market occupancy share.
- ARI
- Average rate index equals subject hotel average daily rate divided by competitive set average daily rate, multiplied by 100; above 100 indicates a rate premium.
- RGI
- Revenue generating index equals subject hotel RevPAR divided by competitive set RevPAR, multiplied by 100; it combines occupancy and rate penetration.
- Fair share
- Fair share equals the subject hotel's room count divided by the competitive set's total room count; actual share divided by fair share measures penetration.
- Index formula
- An index equals the subject hotel's performance metric divided by the competitive set's same metric, multiplied by 100; 100 means parity.
- RevPAR variance
- RevPAR variance can be decomposed into rate effect, occupancy effect, and interaction; this helps explain whether rate or volume drove performance change.
- Data consistency check
- Benchmarking requires consistent definitions, date ranges, currency, and inventory treatment, especially inclusion or exclusion of out-of-order rooms and complimentary stays.