AHLEI CHRM key terms

Total room revenue divided by the number of available rooms for a period. It combines occupancy and average rate into one measure of how well a hotel converts its room supply into revenue.

Total room revenue divided by the number of rooms actually sold in a period. It shows the average price paid per occupied room and is a core input to RevPAR and yield calculations.

The number of rooms sold divided by the number of rooms available, expressed as a percentage. It measures how much of the hotel's capacity is being used during a given period.

The practice of selling the right room to the right guest at the right price at the right time through forecasting, pricing, and inventory control. Its goal is to maximize total revenue and profit from a fixed capacity.

A capacity-control approach that allocates limited inventory among different price and demand segments to maximize revenue per unit of capacity. In hotels it focuses on which business to accept rather than only on price.

All hotel revenue, including rooms, food and beverage, and other outlets, divided by available rooms. It broadens performance measurement beyond room sales to reflect the whole property's earning power.

Gross operating profit divided by available rooms for a period. It links revenue performance to profitability by showing how much operating profit each available room generates.

Dividing a hotel's潜在 demand into distinct groups such as transient business, group, and leisure based on booking behavior and needs. Segments are priced and managed differently because they have different willingness to pay and lead times.

Using rules such as advance purchase, length of stay, or cancellation restrictions to keep lower-priced rates from being bought by guests willing to pay more. Fences protect higher rates while still filling rooms with price-sensitive demand.

The lowest unrestricted public rate a hotel offers for a given date, available without qualifying restrictions such as advance purchase. It serves as a reference point for discounting and rate positioning.

Evaluating whether accepting a group or block of business would displace more profitable demand, based on total revenue and contribution rather than room count alone. It helps managers decide when to say no to large bookings.

Estimating future room demand by date and segment using historical data, booking pace, and market intelligence. Accurate forecasts guide pricing, inventory controls, staffing, and budgeting decisions.

The rate at which reservations are being made for future dates compared with the same point in prior periods. It signals whether demand is running ahead of or behind expectations and informs forecast adjustments.

The change in rooms on the books for a future date over a defined period, such as the past week. Tracking pickup shows how quickly demand is materializing and helps refine short-term forecasts.

Accepting more reservations than available rooms to offset expected no-shows and cancellations. It protects revenue from empty rooms but must be managed carefully to limit walk situations and guest dissatisfaction.

A guest with a reservation who neither arrives nor cancels before the cutoff. No-shows create unsold rooms and lost revenue unless the reservation carries a guarantee or deposit that compensates the hotel.

A formal financial plan for a future period setting expected revenues, costs, and profit targets by department and month. It provides the benchmark against which actual performance is measured and variances are explained.

An updated projection of expected revenues, costs, and profit for the remainder of a period, revised as actual results and new information become available. It differs from a budget because it reflects current conditions rather than the original plan.

Comparing actual results with budgeted or forecast figures and explaining the reasons for differences. It separates volume effects from rate or price effects so managers can take corrective action.

Adjusting room rates frequently in response to changes in demand, booking pace, competitor rates, and remaining availability. It aims to capture higher rates when demand is strong and protect occupancy when it is weak.

A defined group of hotels against which a property benchmarks its rates, occupancy, and RevPAR. Fair comparison requires similar location, positioning, and demand generators among the selected hotels.

A hotel's occupancy share relative to its competitive set, calculated as its occupancy percentage divided by the set's occupancy percentage times 100. Values above 100 indicate the hotel is capturing more than its fair share of demand.

A hotel's average daily rate relative to its competitive set, expressed as an index where 100 means parity. It shows whether the hotel is priced above or below its competitors for comparable business.

A hotel's RevPAR relative to its competitive set, calculated as its RevPAR divided by the set's RevPAR times 100. It combines occupancy and rate performance into a single competitive measure.

The practice of offering the same room rate for the same conditions across all distribution channels. It prevents channel conflict and protects the hotel's pricing integrity, though contractual and legal limits vary by market.

Any path through which a hotel sells rooms, such as direct reservations, online travel agencies, global distribution systems, and tour operators. Each channel carries different costs, reach, and customer ownership implications.

A third-party website that markets and sells hotel rooms online in exchange for commission or margin. OTAs expand reach but reduce net revenue and often control the guest relationship.

Revenue remaining after deducting distribution costs such as commissions and transaction fees. Comparing net revenue across channels reveals which business actually contributes most to profitability.

The total marketing and distribution cost of obtaining one booking, including commissions, advertising, and loyalty costs. It allows fair comparison of direct and third-party channels on a profitability basis.

Rooms and function space sold to a single organization or event, usually booked in blocks with negotiated rates and cutoff dates. It provides base demand but must be evaluated for displacement and total contribution.

Individual reservations not part of a group block, including business, leisure, and discount segments. Transient demand is more responsive to price and availability changes and is central to daily revenue decisions.

Restrictions that require a minimum or maximum number of nights for a stay on certain dates. They shape the mix of business during high-demand periods and help protect revenue from short, low-value stays.

The rules stating when and how a guest may cancel a reservation without penalty. Policy design balances guest flexibility against the risk of lost revenue from late cancellations and no-shows.

The group responsible for forecasting, pricing, inventory controls, and performance analysis, often led by a revenue manager and working with sales, marketing, and finance. Clear roles and meeting rhythms keep decisions timely and coordinated.

Pricing decisions that comply with law and fair dealing, avoiding deceptive fees, discriminatory practices, or collusion with competitors. Trustworthy pricing protects the hotel's reputation and long-term guest relationships.

Sharing revenue results, forecasts, and rationale with owners, department heads, and staff in clear, timely, and honest terms. Good communication builds support for pricing decisions and aligns the team around shared goals.