The Words Nobody Explained
Every term you are expected to already know, with the formula, a plain sentence, and why it changes what you charge. Nothing here is defined from memory — each entry links to the page that works it through.
The three numbers everything is built on
Occupancy, ADR and RevPAR carry the weight. Every other term on this page is a refinement of one of them.
- Occupancy
rooms sold ÷ rooms available × 100
How full you were, as a percentage. Forty rooms sold out of fifty available is 80%.
Easy to hit by cutting price, so it is the one number you never read on its own.
- ADRaverage daily rate
room revenue ÷ rooms sold
What the average sold room went for. Room revenue only — not food, not parking, not fees.
Complimentary rooms are excluded from rooms sold and from ADR under STR's definitions. Count comps as sold and your ADR sinks below what your benchmark report shows.
- RevPARrevenue per available room
room revenue ÷ rooms available (= ADR × occupancy)
What each room you own earned, sold or not. The only one of the three that cannot be gamed by ignoring the other two.
The industry's default scorecard, and the number an owner or lender will ask for.
- TRevPARtotal revenue per available room
total revenue ÷ rooms available
RevPAR including F&B, spa, parking and everything else.
Catches revenue RevPAR ignores. A 2018 HSMAI APAC study measured adoption at 13.7%, so expect to explain it.
- GOPPARgross operating profit per available room
gross operating profit ÷ rooms available
Profit per room you own, rather than revenue per room you own.
The only common metric that notices what a booking cost to acquire. It stays rare — 20.4% adoption in the same study — because there is no universal external benchmark for it.
Benchmark indices
Your number divided by your comp set's number, times 100. Score 100 and you took exactly your fair share.
- Comp setcompetitive set
The six to ten nearby properties you genuinely lose bookings to. You pick it yourself.
Every index below is measured against it, so the choice decides every benchmark number you will ever read.
- MPImarket penetration index
(your occupancy ÷ comp set occupancy) × 100
Your share of the rooms your market sold.
Above 100 means you fill better than your comp set. High MPI with low ARI usually means you discounted your way to a full house.
- ARIaverage rate index
(your ADR ÷ comp set ADR) × 100
Your share of the market's rate.
Above 100 means you hold rate better than the hotels around you.
- RGIrevenue generation index
(your RevPAR ÷ comp set RevPAR) × 100 ≈ (MPI × ARI) ÷ 100
Your overall share of the market's revenue. 100 is fair share — the number owners ask about.
It decomposes. An MPI of 118 with an ARI of 81 is a completely different business from an MPI of 82 with an ARI of 117, and both read as slightly below fair share until you split them.
- Percentile band
Where your rate sits in the spread of live comp set rates for a night — the 25th, 50th, 75th and 90th percentiles of what your market is charging.
Position works when you have no booking history to price from, because it needs the market's data rather than your own.
Time and demand
How a future date is filling, how far ahead people book, and what that tells you to do before the date arrives.
- Pace
rooms on the books vs the same days-out on a benchmark date
How fast a future date is filling, measured against a benchmark.
It tells you to move rate before the date arrives. Compare at the same days-out — never against last year's final number.
- Pickup
rooms on books now − rooms on books at the last snapshot
What you sold since you last looked, for a given future date.
A net figure — cancellations are already subtracted. A week showing +4 could be eleven bookings and seven cancellations.
- Booking windowlead time
arrival date − booking date
How far ahead your guests book.
It sets how early your pricing decisions have to happen. Discounting at 60 days out is usually spending money before the demand has shown up.
- STLYsame time last year
Last year's position for the equivalent date, read at the same number of days before arrival.
Only valid where the dates are comparable. An event that moved, a closed floor or roadworks makes STLY meaningless for that date.
- Perishable inventory
A room night is gone at midnight and cannot be recovered or sold later.
It is the reason last-minute discounting is sometimes right — and the reason it is wrong months out, when the night has not perished yet.
- Distressed inventory
A specific night, inside roughly seven days of arrival, that you can see will not sell at the current rate.
The one case where dropping rate is defensible. Fence it so the discount does not leak into dates that were selling fine.
- Displacement
The revenue you give up by taking one booking instead of another — most often a group instead of the transient business it blocks.
It is the real question behind every group inquiry.
Rates and restrictions
The rate you publish, the floor underneath it, and the three switches that control who can book which nights.
- BARbest available rate
Your standard, unrestricted, publicly bookable rate.
The reference point every discount and package hangs off.
- Rate floor
CPOR + commission on that booking + margin
The lowest rate worth accepting for a given booking, once the cost of servicing the room and the cost of the channel are both counted.
A floor is a limit, not a target. Set it net of commission — a $70 rate at 18% commission nets $57.40.
- CPORcost per occupied room
variable room costs ÷ rooms sold
The incremental cost of selling one more room night — housekeeping, laundry, amenities, utilities on the room.
Fixed costs do not belong in it. Dividing your mortgage by rooms sold produces a number that rises as you sell less, which is the opposite of useful.
- MLOSminimum length of stay
The guest must book at least this many nights on a given arrival date, or the date is not bookable.
Stops one-nighters chopping up a sold-out Saturday. Applied as a blanket rule it can empty a shoulder weekend entirely.
- MaxLOSmaximum length of stay
The guest may book no more than this many nights.
Rarely used outside compression events, where a long cheap stay would block a series of high-rate nights.
- CTAclosed to arrival
Guests may not start a stay on this date, but a stay already running may continue through it.
Protects a peak night while still welcoming the guest who arrives the day before and stays two nights. Usually the right tool when operators reach for MLOS.
- CTDclosed to departure
Guests may not end a stay on this date.
Used to push checkouts off a morning you want to keep sold.
- Stay-through
A rule requiring a booking to cover a specific date to be valid.
Forces the weak nights either side of a peak to travel with it, rather than selling the peak alone.
- Fencing
Attaching conditions to a lower rate — advance purchase, non-refundable, minimum stay, a package — so it is not available to everyone who would have paid full price.
Gets you most of the volume of a discount without moving your BAR, which is what everyone can see.
- Price elasticity
How much demand moves when price moves. Canina & Carvell (Cornell, 2003) measured lodging elasticity at −0.14 across 480 hotels.
At that level, cutting price does not create meaningfully more demand — it mostly discounts the guests who were coming anyway.
- ALOSaverage length of stay
room nights ÷ number of bookings
How many nights the average booking runs.
Longer stays cost less to service per night, and your stay mix decides whether a minimum-stay rule will help or hurt.
Distribution and cost
What a booking costs you once commission, card fees and cancellations are counted.
- OTAonline travel agency
Booking.com, Expedia and the rest — third-party sites that sell your rooms for a commission.
Cloudbeds' 2026 State of Independent Hotels panel (90 million bookings, 180 countries, 2025 data) put OTAs at 63.4% of independent hotel bookings.
- NRevPARnet revenue per available room
(room revenue − distribution costs) ÷ rooms available
RevPAR after the cost of the channel that produced the booking.
RevPAR is the right benchmark against your comp set and the wrong number for deciding between channels.
- Cancellation gap
The share of bookings that are made and then cancelled, so never become revenue.
It belongs in the cost of a channel and in your forecast. Commission alone is roughly three-quarters of what an OTA booking really costs.
- Rate parity
A contract clause requiring you to publish the same rate everywhere you distribute.
The European Commission designated Booking.com a gatekeeper under the Digital Markets Act on 13 May 2024, with compliance from 14 November 2024. Wide and narrow parity clauses are prohibited in the EEA.
- Billboard effect
The claim that listing on an OTA raises your direct bookings, because guests find you there and then book with you.
Cornell's study found a lift in non-OTA reservations — 26% at the single independent hotel tested. One property, in 2009. Treat it as a direction, not a number to plan on.
- USALIUniform System of Accounts for the Lodging Industry
The industry's shared accounting standard. Its 12th edition had a compliance date of 1 January 2026.
It puts resort, destination and urban fees under Miscellaneous Income, not room revenue. They do not raise your ADR or RevPAR, so a hotel quoting ADR including fees is quoting a number nobody can compare.
The systems
Five functions, sold as an unpredictable number of products. Learn the functions and vendor quotes get easier to read.
- PMSproperty management system
The operational database of the hotel: reservations, guest profiles, room assignments, housekeeping status, folios and the night audit.
Everything else plugs into it, so it is the first purchase and the hardest to change later. If the PMS is wrong, everything downstream is wrong.
- Channel manager
Pushes your rates and availability out to every OTA and pulls the bookings back in, so all channels see the same inventory in near real time.
Without one, every rate change is done three or four times by hand, and the gap between a booking landing and you closing the room is where overbookings happen.
- Booking engine
The software that takes a reservation on your own website — date search, room selection, rate display, payment, confirmation.
A phone number and a contact form is not a direct channel. It is a request form that loses everyone browsing at eleven at night.
- Rate shopper
Collects what your comp set is charging, night by night, from live OTA listings.
It is the input every market comparison depends on. You can do a limited version of it by hand and for free before you buy one.
- RMSrevenue management system
Takes demand signals — your occupancy, the comp set, events, search demand — and turns them into a suggested rate per night.
It needs demand history, real demand variation, and enough bookings to learn from. Where those are missing, it underperforms a careful human.
Words you will meet in the product
The vocabulary on the screens themselves. Same terms, same meanings — so nothing in the app needs translating back to this page.
- Price build
base rate → market signal → your rules → final price
The four visible stages behind every suggested rate. Click any night to see which stage moved the number and by how much.
A rate you cannot explain is a rate you cannot defend to an owner. The build is the difference between a suggestion and a black box.
- Guardrail
The minimum and maximum you set per room type. No suggestion publishes outside them, whatever the market does.
A rate held at its cap flags for a bounds review rather than quietly sticking there, so a ceiling set months ago cannot cost you a sold-out night in silence.
- Override
A rate you set by hand for a specific day. It always wins over the suggestion for that night.
You know things the feed does not — a wedding block, a refurbishment, a road closure. Overriding often is a signal worth reading, not a failure.
- Position mode
Pricing driven by where you sit against the comp set rather than by your own occupancy, used when occupancy data is absent or stale.
It is why a property with no booking history can price sensibly on day one — the market's data is available even when yours is not.
- Comp target
The percentile you are aiming to sit at against your comp set — around the 50th in low season, around the 75th in high season.
It turns a vague instinct about being priced right into a position you chose deliberately and can check against.
- Headroom
The distance in currency between your current rate and your comp target for that night.
It sizes the decision. Two dollars of headroom is not worth a conversation; forty on a sold-out weekend is.
- Revenue opportunity
The figure shown for what is still capturable across the dates in view, based on the gap between your rates and the suggestions.
Read it as a direction, not a promise. It assumes the rooms sell at the suggested rate, and rooms do not always sell.
- Demand window
A stretch of upcoming dates grouped by demand level, so a busy run of nights is read as one period rather than seven separate ones.
Pricing a compression period night by night is how the shoulder dates either side get missed.
- Sold-out flag
A marker on a competitor's row showing they have no availability left for that night, whatever rate is still displayed.
A low rate with no rooms behind it is not competition. Matching it gives away money to a hotel that cannot take the booking.
- Rate plan
A bookable rate variant on a room type — flexible, advance purchase, breakfast included, and so on, as they exist in your OTA extranet.
Rates are pushed against plans, not against room types alone. If the plans are wrong, the right price lands on the wrong product.
- Extranet
The OTA's own management console for your property — Expedia Partner Central is the observed connector here.
Extranet access lets the engine reconcile the rates you push against the plans guests can actually book, which is where silent mismatches show up.
Two definitions quietly change your reported numbers, so they are worth repeating here: complimentary rooms are excluded from rooms sold and from ADR under STR's definitions, and resort fees are Miscellaneous Income under USALI's 12th edition rather than room revenue. Neither raises your ADR or your RevPAR.
Or Have the Numbers Calculated
ADR, RevPAR and occupancy against your market, with MPI, ARI and RGI in the same view.