Among the most commonly used terms in the field of revenue management, acronyms stand out: ADR, RevPAR, Occupancy Rate, and many more.
In this article, we aim to clarify these frequently used, but not always well-understood, terms.
KPIs
Key Performance Indicators
RN / REV / ADR / RevPAR
These are the main economic indicators that help assess the health of a hotel business for a specific date/period.
ADR
Average Daily Rate
Identifies the average rate at which a certain number of Room Nights (RN) were sold in a specific period, such as the ADR for the day, week, month, etc.
OCC%
Occupancy Percentage.
PICK UP
A term used to identify the pace at which RN and REV are received for a future period, calculated over a specific elapsed time (from now to x days back from today).
RN
Room Nights
Term used to identify the number of nights sold per individual room over a specific period.
REV
Revenue
Refers to revenue specifically from the rooming department.
RevPAR
Revenue per Available Room
This KPI complements ADR and relates revenue to the total number of available rooms in the hotel, regardless of how many were sold. Looking at ADR and RevPAR together provides a clear picture of the hotel’s performance for a specific date/period.
RN AVAILABLE
Available Room Nights
Identifies all rooms available for sale.
RN UNSOLD
Unsold Room Nights.
DEMAND
Indicates Demand Pressure
Measured as a percentage based on available inventory in a destination, as found on major OTAs and MetaSearch engines. Higher values indicate less inventory available, suggesting high demand pressure. Conversely, lower values indicate ample inventory, suggesting low demand for the destination.
CXL POLICY
Cancellation Policy.
BDG
Budget.
CY
Current Year.
LY
Last Year.
SDLY
Same Day Last Year
A temporal measurement that identifies a type of historical data: a snapshot of what happened on the same date last year for a future date/period of that year.
OTB
On the Books
Used to identify the revenue or Room Nights generated for the current year, from today onward until the end of the year/season.
YTD
Year to Date
Refers to revenue or Room Nights generated for the current year, from January 1 to today.
MTD
Month to Date
Refers to revenue or Room Nights generated for the current month, from the first day of the month to today.
CM
Channel Manager Software.
PMS
Property Management Software.
RATESHOPPER
A tool that enables price comparison with competitors.
Revenue management is a vital practice for any hotel aiming to maximize profits.
Understanding and using these key terms is essential for making informed decisions and choices that can positively impact hotel performance.