Hotel Industry Terms and Functionalities

Most important for modern day hoteliers to know

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To prosper in today's ever evolving and highly competitive hospitality industry, a certain amount of know-how is needed to foster in managing hotels. Here’re some important hotel industry terms and terminologies that every new-age hotelier must know to excel in running hotel business in the long-run.

Frontdesk system

Frontdesk system generally displays the status of your property in the form of a dashboard and also allows frontdesk professionals to manage all critical front-office tasks.

Frontdesk system makes your work really simple by allowing you to do the complex tasks like booking reservations, room change/ upgrade, rate change or payment easy with click, drag and drop functions.

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hotelogix frontdesk system

Night Audit

Night audit in the hotel industry is done to reconcile the hotel’s daily activities and transactions.

It checks all reservation discrepancies, posts charges, generates folios, updates housekeeping status and closes cash counters.

Hotelogix hotel management system automates night audit and provides a report with full accuracy of information useful to evaluate the performances on room occupancy and finances on a daily basis.

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hotel night audit

Black-out Date

Black-out Dates are dates when hotels are unwilling to negotiate room rates or hotel rooms are unavailable for bookings.

Holidays, special dates, events and high demand are often the reason behind a blackout date.

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black-out dates for hotel room bookings

Overbooking and No show

Overbooking is defined as a situation when the hotel allows more number of rooms to book than the total number of rooms available for sale for the same period.

Overbooking estimation is done based on the previous hotel data like no-show, last minute cancellation, stay-over and walk-ins and helps to ensure 100% occupancy.

No show is a situation when a guest does not arrive on a reserved date of booking in the hotel due to any reason.

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hotel overbooking

Point-Of-Sale

Point of sale popularly known as POS is the additional services available with hotels like restaurant, Spa, horse riding and others. POS actually helps in up selling and generating additional revenue from the hotel.

Well integrated POS system with hotel management system like Hotelogix helps in improving customer services, accuracy in accountancy and thus achieving operational efficiency.

Upsell Better
hotel POS system

Reviews and Online review sites

Reviews are your guest’s feedback on the experience they had with your hotel, generally shared on online review sites like trip advisor, booking.com and others.

70% of travelers look at up to 20 reviews in the planning phase which makes it important not only to get positive reviews from satisfied guests but to respond and manage negative reviews too.

Your hotel management system needs to be connected to a smart reputation management tool so as to help you collect, track and manage reviews in an efficient manner.

Improve Guest Reviews
hotel reputation management tool

OTA's

OTAs stands for Online travel agents (websites) showcasing available hotel rooms/services and the guests reviews against these hotels, allowing guest’s to book directly from there, generally, at a discounted rates.

OTAs also charge a commission on the total price of the stay from the hotel which generally ranges from 10% - 25%.

To get the bookings from these OTAs directly updated in your hotel frontdesk you two-way seamless integration between your hotel management system and channel manager. This also ensures real-time rate and inventory update across all OTAs so as to avoid double or overbooking.

Manage Bookings Better
hotel ota channel management

NPS

Net promoter score is a powerful metric to measure guests satisfaction and measure of how likely your guests are to recommend your hotel to a friend/colleague/ relative.

Guests are asked to rate on an 11-point rating scale ranging from 0 (not at all) to 10 (most likely)”How likely are you to recommend this business to a friend or colleague?”.

Based on their rating, guests are classified in 3 categories: promoter, passive or detractor.

  • If rating ranges between 0-6, guest is classified as a detractor.
  • If rating is between 7-8, guest is classified as a passive.
  • And, if the answer is 9-0, guest is classified as a promoter.
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Net Promoter Score

OOO (Out of Order) and OOS (Out of service)

Out of Order is the status of the room that is not ready for selling because it is under repairing or there is some problem such as non-functioning AC, clogged toilet, or broken bed legs. These rooms are deducted from the hotel’s inventory.

Out of service is a status when a room is blocked on a temporary basis and are not deducted from hotel inventory. These rooms will still show in the inventory as a valid room to be sold.

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out of service hotel room status

Recycled inventories and Non- recycled inventories

Recycled inventories are items having limited lifetime but can be used over and over again in housekeeping operations like linens, uniforms, equipment items and others.

Non -recycled inventories are items that cannot be used again and again in housekeeping operations like room supplies, guest amenities and others.

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recycled and non recycled inventories

Room status report and Room status discrepancy

Rooms status report is prepared by the housekeeping department which shows the housekeeping status of each room, based on a physical inspection.

Room status discrepancy is a situation when the housekeeping department’s information of a room differs from that at the front desk.

A hotel management system seamlessly synced with a dedicated housekeeping module not only helps in avoiding such discrepancy situations but also managing the housekeeping staff/work efficiently.

Improve Housekeeping
room status reports

ADR (average daily rate)

ADR stands for Average daily rate, is a key performance indicator which is widely used to indicate the average rate paid against each room sold.

ADR = Room Revenue / Rooms Sold

It is also used to measure the relative performance of the hotels against other of a similar segment.

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ADR(average daily rate)

Yield management

Selling the right room to the right guest at the right time and at the right price.

The essence of yield management strategies for hotels is not to increase room rates, or occupancy rates, but to maximize the average revenue per available room, per night.

(Revenue per available room) RevPAR = (average daily room rate) ADR X Occupancy rate

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hotel dynamic pricing

Best Available Rate (BAR)

Best available rate (BAR) also known as Best rate guaranteed (BRG) is the lowest discounted rate available for a day.

This means for a multiple-night stay guest would need to pay different prices for each night rather than paying same room price for each night.

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hotel best available rate

Rack rate

Rack rates are the standard rates for different room types which are generally published on the room tariff card and hotel website.

It is the hotel’s highest published rates as it does not include any promotional offer or discount. Rack rates normally vary based on the day it is booked, for example, rack rates for a room can be kept low on weekdays as compared to weekends when the demand for the hotels is generally high.

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hotel rack rate

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