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
Margin

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

Within revenue management in the hotel industry, Margin is often used to refer to the commission or fee OTA are making on your room rate. 

Markup

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

Within revenue management in the hotel industry Markup is used to refer to the amount an OTA increases your net room rate, to set the sell rate.

Synonyms: mark-up, markup, mark up
MaxLos - Maximum Length of Stay

What is the meaning / definition of MaxLOS - Maximum Length of Stay in Hotels in the hospitality industry?

At a hotel, sometimes the number of nights an individual guest, couple or family can stay has to be limited, even if the hotel is intensely focused upon maximising revenue! This can apply to a group booking, too, particularly if arrival is planned for a certain date and where a group booking discount has been offered and availed of.

Synonyms: Maximum Length of Stay, maxlos
Merchant Model

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

In hotel revenue management when talking about a Merchant Model, we are referring to the commercial model of an OTA (online travel agency). The main characteristic of a Merchant Model OTA is that the guest pays the OTA at the time of booking a room, and the OTA afterwards pays the hotel when the actual stay occurs.

Synonyms: Merchant Model, Merchant Rate, Merchant Rate Program
MinLOS - Minimum Length of Stay

What is the meaning / definition of MinLOS - Minimum Length of Stay in Hotels in the hospitality industry?

At hotels, the number of nights a guest can stay is not necessarily always up to the paying customer, even if they have lots of money to spend on both rooms and in-house serves, such as food, beverages and recreational activities! Often, a hotel will seek to control the number of nights an individual, couple, family or group book in for, for various reasons.

Synonyms: MinLOS, Minimum Length of Stay
MPI - Market Penetration Index

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

MPI stands for: Market Penetration Index

MPI is a calculation to measure your hotel´s occupancy compared to the average market occupancy levels (also referred to as market share).

Synonyms: Market Penetration Index, MPI
Negotiated Rate

What is the meaning / definition of Negotiated Rate in the hospitality industry?

Companies that regularly use a particular hotel naturally seek a more competitive or economic prices for rooms, meeting rooms and exhibition spaces. Although this may sound bad for business from a hotel's point of view, if the company in question makes regular bookings, the shortfall in revenue can be made up overall across a trading year. Therefore it is often in a hotel's interests to negotiate rates with companies and organisations. The simplest way to do this is to integrate a Negotiated Rate option into a hotel's overall pricing structure and strategy.

Synonyms: Negotiated Rates, negotiated rate
Net Rate

What is the meaning / definition of Net Rate in the hospitality industry?

In hotel distribution we work with many rate levels. Room inventory is sold via some third party distributors at prices that are subject to commission. Others negotiate a (sometimes lower) price with the hotel that does not include a commissions. Such a rate is called a Net Rate.

Synonyms: NetRate, Net Rate
Net Revenue

What is the meaning / definition of Net Revenue in the hospitality industry?

The term Net Revenue, also known as net income can be found at the bottom of every income statement. Net means free from all deductions and revenue refers to the income generated by organisation. To calculate Net Revenue, first add all of the expenses listed on your income statement such as materials, fees, rent, transportation, office supplies, utilities and taxes together. Thereafter, subtract the sum of these expenses from the total revenue to find your net income.

Synonyms: Net Income
NGS - Next Generation Seamless

What is the meaning / definition of Next Generation Seamless, in the hospitality industry?

NGS stands for: Next Generation Seamless.
It is a hotel reservation systems technology of data sharing across the web.

Synonyms: Next Generation Seamless, NGS
No Show

What is the meaning / definition of No-Show in the hospitality industry?

If a guest fails to arrive on a certain date to fulfil a booking (as all so often happens!) and does not cancel; that does not necessarily mean the hotel will lose money. No. Hotels can cover themselves for this eventuality by integrating into their pricing structure something called a No-Show fee. That's right, in the Hospitality Industry, a person who does not arrive where and when they should at a hotel or motel, and makes no explanatory contact, is called a No-Show.

NOP - Net Operating Profit

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

NOP stands for Net Operating Profit, also known as NOI (Net Operating Income). It is a KPI / calculation of net operating income / profit after subtracting all of the operating expenses from the revenues generated by a hotel.

Synonyms: NOP, Net Operating Profit
NPV - Net Present Value

What is the meaning / definition of Net Present Value in the hospitality industry?

NPV stands for: Net Present Value

It is a financial indicator used for evaluating investments. Basically, it represents the income that will result from the investment, minus all the costs. It also takes into account the discount rate and thereby the time value of money, meaning the depreciation of the value of costs and incomes in the future.

Thanks to this, investors can measure if the investment is viable or not. If the choice remains between two investments, with the same NPV, the IRR is able to assist in making the final call.

Synonyms: NPV, Net Present Value
NREVPAR - Net REVPAR

What is the meaning / definition of NREVPAR or Net REVPAR in the hospitality industry?

NREVPAR stands for: Net Revenue Per Available Room

NREVPAR metric is similar to RevPAR, except that it factors in the net revenues (meaning that it accounts for distribution costs, transaction fees and travel agency commissions).

Synonyms: Net Revenue Per Available Room, Net Revpar, nrevpar, net revpar, netrevpar
OBE - Online Booking Engine

What is the meaning / definition of OBE, in the hospitality industry?

OBE stands for Online Booking Engine.

It is an online application which allows to chose from a wide range of travel products (hotels, air tickets, conference halls etc.) and book them on the Internet.

Synonyms: OBE, Online Booking Engine, IBE, Internet Booking Engine, Booking Engine

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