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
Demand Based Pricing

What is the meaning / definition of Demand-Based Pricing in the hospitality industry?

In the Hospitality Industry, prices for services do not have to be permanently set. They can be adjusted, depending upon how many rooms, meals, etc. are needed by customers at any a particular time. This is what Demand-Based Pricing is all about – the price of something changes depending upon how much demand there is for it at a given time.

Demand Generators

What is the meaning / definition of Demand Generators in the hospitality industry?

In hospitality, meeting demand for goods and services is not only about meeting customers' needs, whenever required; sometimes, a hotel or other type of hospitality business can create demand.

Denial

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

Well, it is quite simple. When a hotel cannot accommodate more guests, because it is fully booked at that time, then their response to the potential customers' request is called a Denial.

Design Hotel

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

Design Hotel is as the name implies hotel that is notable for its design. It is focused on the visual concept, on its architecture, on interior decoration, on aesthetics style and décor. The appearance is the main appeal of a Design Hotel and the aim is to evoce a ‘wow’ feeling in the (potential) guest. 

Direct Connect

What is the meaning / definition of Direct Connect in the hospitality industry?

Direct Connect is a synonym of Interface. A point where two systems or organisations, meet and interact.

In the tourism/hospitality industry Direct Connect is a technological connection that interchanges and synchronises data across multiple distribution channels, such as between a Hotel CRS (or PMS) and OTAs.

Direct Connect Availability

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

DCA stands for: Direct Connect Availability.

Discount Rate

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

The term Discount Rate, when used in the Discounted Cash Flow (DCF) analysis, refers to the rate by which to discount projected future cash flows. The discount rate thereby expresses the time value of money and can make the difference between whether an investment project is financially viable or not. It does this by allowing insight on the present value of expected future cash flow.

Displacement Analysis

What is the meaning / definition of Displacement Analysis in the hospitality industry?

For a hotel, the idea of making money through accepting group business bookings sounds like a good idea – an obvious thing to do.

But is that really always the case?

The answer is No!

Sometimes it would be prudent to deny a group booking in favour of leaving rooms available to transient (non-business) customers and walk-in guests. The method used to make this judgement is called Displacement Analysis.

Synonyms: Displacement Analysis, displacement calculation
Distressed Inventory

What is the meaning / definition of Distressed Inventory in the hospitality industry?

Distressed inventory is used in hotels to refer to rooms that are not expected to be sold at full price. For these rooms, hotels often significantly reduce prices to encourage consumers to book last-minute and to avoid their rooms going unoccupied.

Distribution Strategy

What is the meaning / definition of Distribution Strategy in the hospitality industry?

Distribution Strategy determines when and through which channels to sell hotel rooms based upon an analysis of the costs of acquisition of the individual channel.

All of the costs of acquisition of each individual channel will be considered and calculated before the hotel finalizes the list of channel distribution they will be using.
By using the right channel of distribution and driving business to more cost-efficient channels during high demand periods hotels can maximise their profitability.

DMC - Destination Management Company

What is the meaning / definition of Destination Management Company?

A Destination Management Company, also known as DMC, is a company that provides services, resources and expertise specialising in local knowledge for events, activities and tours for other companies. These services can include transportation, gala dinners, planning activities and excursions, restaurants, conference venues, local laws, hotel accommodation, meetings and logistics.

Destination management companies are used by businesses and other establishments to plan events and activities where the establishment is not located and has no local knowledge of.

Synonyms: DMC
Dual-Brand Hotels

What is the meaning / definition of Dual-Brand Hotels in the hospitality industry?

Also referred to as two pack hotels, dual-brand hotel is a term used to describe a property that combines and houses two hotels which operate separately. Usually these types of hotels combine two brands from the same chain. The economic advantage of this set-up is that both hotels can cater to one demographic specific to their offerings, but are able to share resources like back of house operations. By sharing many resources and expenses, the Dual Brand hotels can reduce their operational costs drastically. The most popular pairings of brands are of select-service and extended-stay hotels under one roof. The dual-brand model offers developers and owners a chance to command a larger market share, maximising potential cash flows and producing a greater return to the land.

Synonyms: Two pack hotel
Dynamic Packaging

What is the meaning / definition of Dynamic Packaging in the hospitality industry?

Dynamic Packaging is a method of creating deals or packages based upon the components selected by the customer.

This method combines inventory (rates and availability) from multiple sources e.g., hotels, rental cars and flights in one online application. It allows the customers to create and book a customized itinerary resulting in a higher flexibility compared to pre-packaged holidays.

 

Synonyms: packaging, dynamic packaging
Dynamic Pricing

What is the meaning / definition of Dynamic Pricing in the hospitality industry?

Successful hotels around the world aim for optimum profitability at all times. There are lots of things a hotel can do towards achieving this. One is for the Revenue Management Team to make Dynamic Pricing part of their overall strategy. Consortia/negotiated rates are no longer fixed (in some cases).

E-commerce

What is the meaning / definition of E-commerce in the hospitality industry?

E-commerce is also known as Electronic Commerce (or EC). It refers to commercial transactions conducted electronically on Internet. It means basically any form of business transaction in which the parties interact electronically rather than by physical exchanges or direct physical contact.

Synonyms: e commerce, e-commerce, ecommerce

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