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
Early Bird Discount

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

Hotels can increase advanced bookings by offering something called an Early Bird Discount. This is a type of promotion that many hotels across the world use to increase revenue.

Synonyms: Early Bird Discount, early bird
EBITDA

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

EBITDA stands for : Earnings Before Interest, Taxes, Depreciation and Amortization.

This KPI is used to determine how profitable a company or business is with regard to its operations (the profit on the products it produces and sells).

EBITDAR

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

EBITDAR stands for: Earnings Before Interest, Taxes, Depreciation, Amortisation, and Rent

It is the same calculation as EBITDA, with the exception that rents and/or restructuring costs are excluded from the expenses.

It is useful KPI for hotels to evaluate its financial performance.

How do you calculate EBITDAR?

EBITDAR Formula for Hotels, by Xotels

Eco Hotel

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

The term Eco Hotel describes a type of hotel which heavily emphasises sustainability in all its services and products delivered. There are many areas where Eco Hotels show their ability to be sustainable, starting with areas such as green energy and ending at small details such as recyclable straws instead of plastic ones. Eco Hotels have become a preferred accommodation type for environmentally conscious travellers.

Eco Lodge

What is the meaning / definition of Eco Lodge in the hospitality industry?

The term eco lodge refers to a type of accommodation located in a remote destination in nature. Generally eco lodges are equipped with less than 30 rooms. They are designed to have minimal impact on the environment and to be as sustainable as possible in their usage of resources. Furthermore they aim to improve the welfare of the local population by supporting local suppliers and workers.

ED - Electronic Distribution

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

ED stands for: Electronic Distribution (also called online distribution). It is a type of distribution that uses purely electronic media. E-distribution is an important component of E-commerce.

Synonyms: ED, Electronic Distribution
Extranet

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

An Extranet is a website that allows controlled access to partners, vendors and suppliers or an authorised set of customers. In other words it is a channel which can be administered externally via a login into the system.

Fair Market Share

What is the meaning/definition of Fair Market Share in the hospitality industry?

Fair Market Share is an indication that a hotel’s overall performance stacks up against its immediate competitors.

A hotel within a competitive set can work out if it’s getting its Fair Market Share through a simple calculation:

  • Fair Market Share = Total number of rooms at the hotel / Total number of rooms in the comp set
Fam Trip

What is the meaning / definition of FAM Trip in the hospitality industry?

The term FAM stands for Familiarisation. The Tours - commonly known as FAM Trips - are trips organised by travel providers (can be a Tour Operator, an Airline, a Hotel Chain, a Tourism Board or other DMOs representing a Destination, etc.) with the purpose of educating about their products & services and promoting them.

Synonyms: Fam Tour, farm trip
FC - Fixed Costs

What is the meaning / definition of Fixed Costs in the hospitality industry?

Fixed Costs, abbreviated as FC, are costs which are invariable, meaning they stay relatively constant in value despite changes in production or sales rates. Fixed Costs, mixed costs and variable costs make up the total costs at any business. In the hospitality industry Fixed Costs make up a large percentage of total costs incurring, as hotels require many expensive assets such as buildings, technology, furniture and equipment. Successful Hotel Operators are able to reduce Fixed Costs, thereby increasing profitability for hospitality businesses

Synonyms: Invariable Costs, FC, Fixed Costs
Feeder City

What is the meaning / definition of Feeder City in the hospitality industry?

The term Feeder City refers to cities of origin which feed travelers to hubs or gateway cities. Basically it is to determine where does the tourism come from.

Fenced Rate

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

The term Fenced Rate refers to reservations that offer certain benefits for bookers: under some conditions and requirements.

FFE - Furniture, Fixtures and Equipment

What is the meaning / definition of Furniture, Fixtures, and Equipment in the hospitality industry?

FFE stands for Furniture, Fixtures, or other Equipment that has no permanent connection to the structure of the building. It is an accounting term used in valuing, selling, or liquidating a company or building. When valuing a company it is important to consider FFE as they may depreciate substantially.

Synonyms: FFE, Furniture Fixtures Equipment, Furniture Fixtures and Equipment
Fit-Out

What is the meaning / definition of Fit-Out in the hospitality industry?

The term ‘Fit out’ is used in the hospitality industry to refer to the process of preparing an interior space for the guests and customers. This includes the planning, choosing and fitting of the interior. Everything down from the wall paper to the fork used by the customer is appropriately matched to create an overall concept. This service is often done by Hospitality Design and Concept Development Companies.

The interior of a cafe, bar, restaurant and hotel all greatly influences the guest experience. But not only that, successful businesses also recognise the value of creating a space in which employees are encouraged to commit themselves towards providing extraordinary service. It's of highest importance that an environment brings the best out of the employees. Making sure that every detail is carefully curated and chosen allows a business to run more efficiently and effectively. This takes a lot of consideration of details, as choice of material will eventually influence the longevity of an environment.

An inspiring interior is therefore instrumental in building brand loyalty and striking the right note with staff and clients.

Flash Sales

What is the meaning / definition of Flash Sales in the hospitality industry?

Flash Sales are highly discounted and time-limited sale promotions. Hotels usually use this way of discounted sales to sell an unsold inventory. Selling those ‘hot deals’ is an opportunity for underperforming hotels to generate growth.
Flash sales can be initiated by email campaigns, which reach consumers who are usually not contacted through existing distribution channels.

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