Hotel Terminology

Hotelier-speak

There are many terms floating around in the hotel industry, so we created this page to help you keep things straight.

Allocation

The number of rooms a hotel has available to be sold.

Channel

A specific stream of revenue for a hotel. A third party sales website like Expedia.com or HRS is a "channel".

CTA - Closed to Arrival

When "closed to arrival" is set for a date, a guest can not book this date if their stay begins on this date. If their stay includes this date, but does not begin on it - then it would be bookable.

CTD - Closed to Departure

When "closed to departure" is set for a date, a guest can not book this date if their stay ends on this date. If their stay includes this date, but does not end on it - then it would be bookable.

Cut Off Days

This represents the number of days a guest must book their reservation prior to their arrival. For example, if a guest wants to book a reservation for tomorrow, and tomorrow's cut off days is set to 2, it would not show as bookable to the guest since it was not booked 2 days prior to the arrival date.

Extranet

The "front end" of a hotel sales website displays the hotel's information to allow guests to book stays with the hotel. The extranet is the "back end" of a hotel sales website that allows the hotels to log in to enter all of their rates, availability and restrictions.

Brand

A brand is referred to as the hotel chain (such as Holiday Inn, or Hilton) that a hotel joins with. A hotel can change their brand (i.e. switch from a Hilton to a Holiday Inn) during the course of the lifetime of the hotel.

GDS - Global Distribution System

A GDS is a company that provides computer hardware and software to travel agencies for airplane, hotel, and car reservations. The four big GDS companies are Amadeus, Sabre, Galileo and Worldspan. Third party channels can also subscribe to a GDS feed to book these items as well.

Lead Days

See Cut Off Days.

Margin & Markup

Margin and markup are used to calculate how much a sales website collects as their fee from booking one of your hotel's room nights.

These two can be a little tricky in the hotelier industry as they are fundamentally different - and are commonly confused. Here is an example scenario and a description of how markup and margin would be calculated.

Example Scenario:
The double room sells for $100 per night, and a guest books a one night stay on a wholesaler's website you work with. The total amount collected from the guest is $100.00.

The wholesaler takes $25 as their fee, leaving your hotel with $75 to collect as your net rate.

Markup
The wholesaler's take is equal to 1/3 the amount your hotel takes - $25 to your $75.
This means the markup is 33.33% (1/3 = .3333 x 100 = 33.33%) for your hotel's sales on this wholesalers website. The wholesaler's take will always be equal to 33.33% of the amount your hotel takes.

Margin
The wholesaler's take is equal to 1/4 of the total amount collected - $25 of $100.
This means the margin is 25.00% for your hotel's sales on this wholesaler's website. The wholesaler's take is equal to 25% of the total amount collected from the guest.

So yes - a 33.33% Markup equals a 25.00% Margin for your hotel. These two principles are just two common ways of calculating how much your hotel's net rate will be for room nights sold on a wholesaler's website.

Maximum Nights or Maximum Length of Stay (aka Maximum Nights Arrival)

A Maximum length of stay on arrival restriction limits availability by specifying a maximum number of nights that may be booked for stays that include the restriction date as the arrival date.

Maximum Nights Through or Maximum Length of Stay Through

A Maximum length of stay through restriction restricts availability by specifying a maximum number of nights that may be booked for stays that include the restriction date in any part of the stay date range.

Minimum Nights or Minimum Length of Stay (aka Minimum Nights Arrival)

A Minimum length of stay on arrival restriction limits availability by specifying a number of nights that must be booked for stays that include the restriction date as the arrival date.

Minimum Nights Through or Minimum Length of Stay Through

A Minimum length of stay through restriction limits availability by specifying a number of nights that must be booked for stays that include the restriction date in any part of the stay date range.

Net Rate

When your hotel's room nights are sold on a wholesaler, the amount your hotel takes from the sell rate is your net rate. So if the guest pays $100 for a room night (which is the sell rate) at your hotel and you collect $75, this means your net rate is $75.

PMS - Property Management System

This is the software that is used to manage all operations of a hotel.

Rate Parity

You achieve rate parity for your hotel when the same rate structure exists across all of your hotel's distribution channels. This is important for many reasons. It increases your hotel's rate integrity, so the guest feels confident they are getting the best rate available no matter what channel they book your hotel through. Another reason is to protect your relations with the channels you work with as they all feel they are on equal footing when working with your hotel.

Sell Rate

When your hotel's room nights are sold via one of your distribution channels, the amount the guest has to pay for your hotel's room night is the sell rate.

Stop Sell

This is the act of stopping the sales of your hotel's room nights on your distribution channels. A stop sell (aka closeout) prevents your hotel from being bookable. This is typical when a hotel is sold out for a certain time period.

Wholesaler

This is a third party organization that sells your hotel's room nights. There are many terms for this such as third party sales sites, distribution channels, extranets, merchants or merchant model.