• Nov 01 2019

    Hotel Revenue Management Glossary for advanced terms

    Byadmin_ml InHotel Revenue Management

    Recently we presented you with the art of Open Pricing and some of the terms used were difficult to understand.  In this latest blog post, we will provide you with the definitions of the advanced terms we use for our reporting and strategy.

     

    1. GOP (Gross Operating Profit): Gross Operating Revenue – Gross Operating Expenses
    2. GOPPAR (Gross Operating Profit Per Available Room): GOP (Gross Operating Profit) / Available Rooms
    3. EBITDA ( Earnings Before Interest, Taxes, Depreciation, and Amortization) : Revenue – Expenses*  (*Expenses, in this case, are excluding interest, taxes, depreciation, and amortization)
    4. RGI (Revenue Generation Index): Your Hotel’s RevPAR / Hotel Market RevPAR
    5. MPI (Market Penetration Index): Hotel Occupancy % / Market Occupancy %
    6. ALOS – Average Length of Stay:  Number of room nights / Number of bookings
    7. ARG – Average Rate per Guest: Total room revenue divided by the number of guests
    8. ARI – Average Rate Index: It measures the performance of the ADR compared to the comp set during the same period
    9. BAR – Best Available Rate: It is the lowest rate of the day that is available for guests to book. A result of a hotel property’s normal cancellation policy
    10. NREVPAR – Net REVPAR: stands for Net Revenue Per Available Room= Net Rooms Revenue / Rooms Available
    11. ZBB – Zero Base Budgeting: The term is used when the budgeting for hiring employees takes into account the occupancy

    Written by Michalis Arvanitis