Glossary of Hotel Terms

Definitions to Commonly Used Hotel Terms

buying a hotel in costa rica

Many of our hotel clients in Costa Rica have very little, if any, formal experience or training in hotels and hospitality. So, find it helpful to share some basic hotel terms as you start your journey to becoming a seasoned, experienced and successful hotelier in Costa Rica.

Adjoining Rooms – Rooms with a common wall but no connecting door.

Advance Deposit – The payment of at least one night’s stay plus tax paid in advance, used to guarantee a reservation.

Amenities – Local facilities such as stores and restaurants

Attractions – Things for guests or tourist to do in a particular area around the hotel.

Advance Rates – Generally discounted rates to encourage guests to book in advance.

Average Daily Rate (ADR) – The total rooms revenue divided by the total number of rooms rented Example: 40 unit property, 20 rooms rented, room revenue $2,000, $2,000/20 rooms = $100.00 ADR

Back of the House – Functional areas of the hotel in which personnel have little contact with the guest, such as maintenance, housekeeping and laundry.

BAR – Best Available Rates (typically rates that are the ‘best available’ at the time of booking, often these are short lead bookings)

Backyard  – the area surrounding your hotel within a 5-10 mile radius.

Book to Sell – or reserve a room ahead of time.

Check-In – the process by which a guest registers their arrival at a hotel and receives their key/keycards.

Check-Out -the process by which a guest settles their bill and hands back any key/keycards.

Confirmation Number – a code that provides a unique reference to a reservation record and assures the guest that the reservation record exists.

Connecting Rooms -rooms with individual entrance doors from the outside and connecting door between.

Continental Breakfast – a small meal that usually includes coffee, juice assorted breads and sweet rolls, and other extended selections based on franchise standards.

Competitor Set  – a list of hotels / hotel chains that are direct competitors.

Co-op Advertising – advertising funded by two or more destinations and /or suppliers.

Corporate Rate – a rate established for corporate business that produces a substantial number of room nights

Credit Card Guarantee   – a type of reservation that is guaranteed with a major credit card.  The room is paid for whether or not the guest actually arrives and stays on property.

CRO – Central Reservations Office – the central ‘hub’ that handles bookings of behalf of a hotel (or chain).

Cut-Off Date  – the date agreed upon between a group and a hotel after which all unreserved rooms in the group’s block will be released back to the general rooms’ inventory for sale

Direct Bill – a method of payment where the amount of the guest’s account would be charged to a company. It must be approved in advance by the General Manager through credit references.

F&B  – Food and Beverage. Refers to restaurant and bar business.

FF&E  – Furniture, Furnishings and Equipment.

FIT (Free Independent Travel) – Individual travel in which a tour operator has previously arranged blocks of rooms at various destinations in advance for use by individual travelers. These travelers travel independently, not in a group, usually by rental car or public transportation.

Folio  – A record of hotel guest charges and transactions

Forecast Report  – An estimation of occupancy for a future period of time with the projected average daily rate.

Front of the House  – The functional areas of the hotel in which personnel have extensive guest contact, such as the front desk staff.

GOP – Gross Operating Profit (Total revenue less expenses)

Global Distribution System (GDS) – network of electronic reservation systems used globally by travel agents booking hotel rooms (and airlines). Common GDS include Sabre, Galileo and Amadeus.

Guaranteed No Show (GNS)  – a reservation that was guaranteed for late arrival yet the guest failed to show up or cancel the reservation.

Guaranteed Reservation  – a reservation that assures the guest that a room will be held until check-out time of the day following the day of arrival.  The guest guarantees payment for the room, even if it is not used, unless the reservation is properly canceled. Types of guaranteed reservations include credit card, advance deposit, and direct bill.

Guest Ledger – a list of occupied rooms at the current time.

Head in Beds – Industry slang referring to the primary marketing objective of accommodations and most destinations – increasing the number of overnight stays.

In-House Guest List  – guest ledger for the guest checked into to hotel.

Late Arrival  – guests that advise they will be later than the agreed time of arrival.

Late Charge – charges that may be passed on to a guest after their departure from a hotel. For example, telephone calls or mini bar charges that weren’t determined before the guest left.

Late Check Out  – when a guest leaves the hotel later than the agreed time of departure. This may be at an agreed ‘Late Check Out’ fee.

Lead Time  – the length of time between when a booking is made and the actual stay date. Typically hotels prefer long lead times as it allows them to plan room inventories/rates.

LOS (or Length of Stay)  – The duration of hotel guests visit.

Mystery Guest  – a quality control measure whereby an undercover employee (usually of an external organization) poses as a guest to evaluate the performance of a hotel.

Net Rate  – a wholesale rate to allow a third party markup.

NoWalk/No-Hang-Up-Policy  – property staff will not let a potential guest either walk out the door or hang up the phone without selling the room when the property is trying to increase occupancy.

Occupancy/Occ  – a calculation representing the number of hotel rooms sold to the number available for sale – Example:  63 unit property, 40 rooms sold, = 63% Occupancy

OTA – Online Travel Agent/Agency – a 3rd party who often sells a hotels room inventory on their behalf (and is paid a commission for any bookings referred) Examples of some of the main OTA’s include Expedia, Booking.com, Hotels.com etc.

Overbooking  – Accepting more reservations than there are available rooms

Package – a fixed price salable travel product that makes it easy for a traveler to buy and enjoy a destination or several destinations. Packages offer a mix of elements like transportation, accommodations, restaurants, entertainment, cultural activities, sightseeing and car rental.

Par – level of linen used to fill all rooms once

PMS – property Management System.

Property Resource Manual – a binder with an abundance of information on the hotel and the surrounding area to assist the sales manager in better selling the hotel.

Rack Rate – the top value for a particular room

Retail Agent – a travel agent

Revpar (Revenue Per Available Room) – total room revenue divided by the total number of rooms available, Example: 63 unit property, Room revenue $2900.00 $2900.00/63 units =$46.03

ROH  – Run of House, no room has been allocated to a guest before arrival, so they will get any room available.

Room Inventory  – the volume of rooms available to be sold.

Room Only  –  a rate for the room only, no extras included.

Site Inspection – an assessment tour of a destination or facility by a meeting planner, convention or trade show manager, site selection committee, tour operator, wholesaler or incentive travel manager to see if it meets their needs and requirements prior to selecting a specific site for an event. After site selection, a site inspection may be utilized to make arrangements. In Costa Rica, this is done a lot for weddings.

Slippage – the percent (%) difference between the blocked number of rooms for a group and the actual consumed.

TA  – Travel Agent

Tour Operator – develops, markets and operates group travel programs that provide a complete travel experience for one price and includes transportation (airline, rail, motorcoach, and/or ship), accommodations, sightseeing, selected meals and an escort. Tour operators market directly to the consumer, through travel agents and are beginning to be listed on computerized reservation systems.

Tour Wholesaler – an individual or company that sells tour packages and tour product to travel agents. Tour wholesalers usually receive a 20% discount from accommodations, transportation companies and attractions and pass on a 10 to 15% discount to the retail agent.

Travel Agent – an individual who arranges travel for individuals or groups. Travel agents may be generalists or specialists (cruises, adventure travel, conventions and meetings.) The agents receive a 10 to 15% commission from accommodations, transportation companies and attractions for coordinating the booking of travel. They typically coordinate travel for their customers at the same or lower cost than if the customer booked the travel on his/her own.

Travel Seasons – travel industry business cycles including:
Peak: Primary travel season
Off Peak: Period when business is slowest
Shoulder: Period between peak and off peak periods when business is stronger, but has room for growth.

Upgrade  – process by which a guest is offered a better room than he/she booked.

Upsell – process by which a guest is offered (at a cost) additional services or upgrades (often at the point of purchase or upon arrival to the hotel).

Vacant Ready (VR)  – a room status term indicating that the room has been cleaned and inspected, and is ready for an arriving guest.

Vacant Dirty (VD) – a room status term indicating that the guest has check out but the room has not been cleaned or inspected.

Walk-In  – a person requesting a room who had not reservation

Wholesaler – develop and markets inclusive tours and individual travel programs to the consumer through travel agents. Wholesalers do not sell directly to the public.