Hotel Revenue Management Glossary

Need to know what a hotel term means? Look it up in the Xotels Glossary. We explain definitions of terminology industry lingo from hotel revenue management, ecommerce, marketing and distribution.

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Term Definition
1 Star Hotel

What is the meaning / definition of a 1 Star Hotel in the hospitality industry?

A 1 Star Hotel is a hotel that offers only the essentials while still meeting reasonable hygiene and security standards. Ranking: Tourist (*)

A one star hotel offers the bare essentials such as a bed and clean sheets, a fully functioning bathroom (occasionally shared), self service meals / vending machines. Other facilities of the hotel are generally accessible at the guest's expense. It therefore is suitable for budget travellers, looking for basic accommodation and service. In the UK the following criteria must be fulfilled to carry the title of a 1 Star Hotel:

Synonyms: one star hotel, 1*
2 Star Hotel

What is the meaning / definition of a 2 Star Hotel in the hospitality industry?

A 2 Star Hotel is a hotel that provides the bare essentials with some comfort quality. Standard (**)

At a 2 Star Hotel, in addition to the comfort and hygiene essentials, the amenities for the guest are of a significantly higher quality and appeal than to that of a 1 Star Hotel. The hotel may be more decorated and the quality of the bedsheets and amenities may also be better. It therefore is suitable for economy travellers, looking for a conveniently located hotel with slightly more than only the basic amenities and service standards. In the UK the following criteria must be fulfilled to carry the title of a 2 Star Hotel:

Synonyms: two star hotel, 2*
3 Star Hotel

What is the meaning / definition of 3 Star Hotel in the hospitality industry?

A 3 Star Hotel is a hotel that provides average amenities, higher quality service, physical attributes and design. Ranking: Comfort (***)

Three star hotels aim towards meeting guest expectations and providing pleasant stay. These hotels are often located near major express-ways, airports, business areas, convenient for shopping trips etc. They thereby provide their short term guests with a brief, efficient but comfortable stay.

Synonyms: three star hotel, 3*
4 Star Hotel

What is the meaning / definition of 4 Star Hotel in the hospitality industry?

A 4 Star Hotel is a hotel that provides above average, deluxe service and experience for the guest. First Class (****)

A 4 Star hotel has a larger range of facilities available and the design is high quality. All service standards are aimed towards pleasing the guest. These hotels are usually located near city centres and are equipped with dining areas, exclusive facilities such as in-house gyms and swimming pools.

Synonyms: four star hotel, 4*
5 Star GL

What is the meaning / definition of 5 Star Grand Luxe in the hospitality industry?

GL stands for: Grand Luxe

The classification is commonly used in Spain to differentiate extremely prominent five star hotels, located in buildings of historical or cultural significance from others in the 5 star classification rank.

Synonyms: 5 * GL, five star GL
5 Star Hotel

What is the meaning / definition of a 5 Star Hotel in the hospitality industry?

A 5 Star Hotel is a hotel that provides a luxury service through all its means of operation. Luxury (*****)

A 5 Star Hotel is geared towards catering to guests at the highest level. Therefore everything from the exterior of the hotel down to the tableware should display excellent quality and high attention to detail. The service staff is meant to be highly trained and the attention should be focussed on providing the guest with the best experience possible. Exceptional levels of proactive service and customer care are essential.

Synonyms: five star hotel
7 Star Hotel

What is the meaning / definition of 7 Star Hotel in the hospitality industry?

7 Star Hotels are hotels with the highest level of luxury available in the world. Officially there is no classification for 7 star hotels and the term 7 Star Hotel, has often been rather described as a marketing stunt than a hotel classification or rating, as it is not appointed by a specific institution according to openly agreed on criteria.

Synonyms: seven star, 7*
AAA Five Diamond Award

What is the meaning / definition of AAA Five Diamonds Award?

The AAA Five Diamond Award is an independent hotel appraisal system rewarded by the AAA (American Automobile Association) to hotels in the U.S., Canada, Mexico and the Caribbean. It can be compared to the 5 Star hotel classification system, known in Europe and other parts of the world.

Synonyms: AAA 5 Diamond award
ABR - Average Bed Rate

What is the meaning / definition of Average Bed Rate (ABR) in the hospitality industry?

ABR stands for: Average Bed Rate

The "Average Bed Rate" is the total amount charged for beds, divided by the total number of beds sold. This ratio allows revenue managers to measure more than just the "Average Room Rate" or ARR.

Synonyms: ABR, Average Bed Rate

What is the meaning / definition of Accommodation in the hospitality industry?

The term accommodation refers to a room, building or lodging which provides shelter for a person to stay, sleep and live. There are many different types of spaces that classify as accommodation, though in the hospitality industry the term is used to refer to a room at a hospitality company such as a hotel, resort, hostel, motel etc.

Administration Costs

What is the meaning / definition of Administration Costs?

Administration costs, also known as overhead costs or fixed costs are the costs which incur on a business or hotel solely from running. These overhead costs are not directly impacted by manufacturing, production or sales volume and can therefore be described as fixed costs. They can be seen as the basic costs that occur without a sale having to be made. Examples for administrative costs are taxes, rent, insurance, licensing fees, utilities, accounting and legal teams, administrative staff, facility upkeep, etc.

On the contrary to these fixed costs stand the variable costs, which vary per product/ service sold.

Synonyms: Administrative expenses, Overhead costs, Fixed costs
ADR - Average Daily Rate

What is the meaning / definition of ADR in the hospitality industry?

ADR stands for: Average Daily Rate

It is a KPI used to calculate the average price or rate for each hotel room sold for a specific day.

It is one of the most common financial indicators to measure how successful the performance of the hotel is against other hotels that have similar characteristics such as size, clientele and location and/or its own previous figures.

How do you calculate ADR?

ADR Formula for Hotels, by Xotels

Synonyms: ADR, Average Daily Rate
ADS - Alternative Distribution System

What is the meaning / definition of ADS in the hospitality industry ?

Alternative Distribution System, short ADS is a term used to describe the distribution via 3rd party websites.

This includes online travel agencies (OTA), travel portals, travel search engines / directories, online hotel consolidators, airline websites with online reservation options.

Synonyms: ADS, Alternative Distribution System
Adult Only Resort

What is the meaning / definition of Adult Only Resort?

Resort targeted towards couples and groups who wish to have a romantic or relaxing holiday. The hotels are only available for guests above the age of 18.

Agency Model

What is the meaning / definition of OTA Agency Model in the hospitality industry?

In hotel revenue management when talking about an Agency Model, we are referring to the commercial model of an OTA (online travel agency). The main characteristic of the Agency Model OTA is that the guest pays the Hotel directly when the stay occurs and the hotel pays the OTA commission after the stay has taken place.

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