emerit Hotel GM / CHGM key terms

A hotel performance measure found by multiplying average daily rate by occupancy percentage, or by dividing total room revenue by available rooms. It combines pricing and occupancy into one indicator of how well rooms earn income.

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 used with occupancy to judge pricing strategy and market positioning.

The share of available rooms sold in a period, calculated by dividing rooms sold by rooms available and multiplying by one hundred. It measures demand capture but says nothing about price achieved.

Gross operating profit divided by available rooms for a period. Unlike RevPAR, it reflects cost control and departmental margins, so it is a stronger indicator of management performance than revenue alone.

Income remaining after all departmental and undistributed operating expenses are deducted from total revenue, before fixed charges such as rent, property taxes, insurance, and management fees. It is the standard measure of hotel operating performance.

Revenue from a department such as rooms, food and beverage, or spa minus that department's direct costs. Departmental profit shows which profit centers contribute most before shared overheads are allocated.

Costs that support the whole property and cannot be assigned to one revenue department, such as administration, sales and marketing, property operations, utilities, and information technology. They are deducted after departmental profits to reach gross operating profit.

A standardized hospitality accounting framework that defines revenue, expense, and profit lines consistently across hotels. Its common format lets owners and managers compare results across properties, brands, and time periods.

The difference between actual financial results and the approved budget for a period, usually shown as an amount and a percentage. Managers investigate large unfavorable variances to correct overspending or lost revenue.

A financial plan for a full year setting expected revenue, expenses, and profit by department and month. It becomes the benchmark for performance review and usually requires owner or asset manager approval.

A rolling projection of revenue, costs, and profit for the remainder of a period based on current bookings, pace, and market conditions. It lets managers adjust staffing, purchasing, and pricing before the year ends.

Funds spent on long-term assets such as building improvements, furniture, equipment, or technology that provide benefit over several years. CapEx is usually planned through a reserve or owner-approved schedule rather than daily operations.

The practice of controlling room inventory, rates, and distribution channels to maximize total revenue from available capacity. It relies on demand forecasting, segmentation, and pricing rules rather than discounting by intuition.

Rules that restrict a low rate to guests who accept conditions such as advance purchase, minimum stay, or no cancellation. Fencing protects higher rates from being undercut by price-sensitive buyers.

Dividing potential guests into groups with similar needs and buying behavior, such as corporate, leisure, group, and government. Segmentation guides pricing, sales effort, and channel decisions.

Accepting more reservations than rooms available to offset expected no-shows and cancellations. It must be managed within legal and brand rules, with plans to walk guests and compensate them when demand exceeds supply.

A guest with a confirmed reservation who is relocated to another hotel because no room is available. The hotel typically pays for the alternate accommodation and transport and follows brand or legal compensation rules.

A schedule of required upgrades and deadlines issued by a brand, often tied to a franchise agreement renewal or conversion. The general manager must plan funding and execution without disrupting guest service.

Mandatory rules set by a hotel brand covering facilities, service, cleanliness, training, and reporting. Compliance is checked through audits, and repeated failures can lead to penalties or loss of the franchise.

A structured inspection, often by the brand or an independent evaluator, that scores a hotel against defined service and product standards. Results identify gaps and may affect the hotel's license to operate under the brand.

A contract in which a hotel owner pays a brand for the right to use its name, systems, and reservation network in exchange for fees and compliance with standards. It sets the term, territory, and performance obligations.

An agreement under which an owner engages an operating company to run the hotel for a fee, usually a base fee plus an incentive tied to profit. It defines authority, reporting, performance tests, and termination rights.

The owner's representative who monitors the hotel's financial performance, budget, capital plans, and contract compliance. The asset manager works with the general manager but protects the owner's investment value.

A measured rating of guest experience, often from post-stay surveys, review sites, or brand tracking. It is used to spot service gaps, compare against competitors, and link service quality to loyalty and revenue.

A loyalty metric based on the share of guests who would strongly recommend the hotel minus the share who would not. It summarizes advocacy rather than overall satisfaction and is compared over time and against competitors.

The actions taken to resolve a guest complaint, correct the problem, and restore goodwill, often through apology, service recovery, or compensation. Effective recovery can turn a dissatisfied guest into a repeat customer.

Any gap between what a guest expects and what the hotel delivers, such as a delayed check-in, dirty room, or billing error. Managers analyze failures by type and frequency to remove root causes.

A formal invitation asking hotels to bid on group or corporate business by stating rates, availability, and services. The sales team responds with a tailored offer that balances volume, rate, and seasonality.

Total labor cost, including wages, benefits, and payroll taxes, divided by total revenue for a period. It is a core productivity measure, but must be read alongside service standards and occupancy levels.

A measure of output per labor hour or per employee, such as rooms cleaned per housekeeper hour. It helps managers schedule staffing to demand without eroding cleanliness or service quality.

The direct cost of goods sold in revenue departments, mainly food and beverage, expressed as a percentage of that department's revenue. It is controlled through purchasing, inventory, portion standards, and menu pricing.

The number of times stock is sold and replaced over a period, calculated as cost of goods used divided by average inventory. Low turnover signals excess stock, waste, or slow-moving items.

A written description of the required quality, size, packaging, and delivery terms for an item bought by the hotel. Clear specifications support competitive bidding, consistent quality, and cost control.

The hotel's documented system for identifying hazards, controlling risks, training staff, and responding to incidents. It covers areas such as kitchens, housekeeping chemicals, pools, and emergency evacuation.

A structured review that identifies hazards, estimates the likelihood and severity of harm, and sets controls. It is recorded, reviewed regularly, and updated when work practices or equipment change.

A written record of an accident, injury, near miss, security event, or property damage. Accurate reports support investigation, insurance claims, legal defense, and prevention of repeat events.

Documented procedures for evacuation, sheltering, medical response, and communication during fire, severe weather, or other emergencies. It assigns roles, includes drills, and is reviewed with local authorities.

The legal and ethical obligation of the hotel to take reasonable steps to protect guests, staff, and visitors from foreseeable harm. It underpins security, safety, food hygiene, and premises maintenance decisions.

Prepared messages, spokespeople, and channels for informing guests, staff, media, and authorities during a serious incident. It aims to give accurate information quickly while protecting safety and reputation.