Hotel glossary
Hotel and PMS terms, explained
Quick definitions for the terms that come up when you run hotels or choose a property management system.
- ADR (Average Daily Rate)
- Room revenue divided by the number of rooms sold for a period. It tells you the average price paid per occupied room.
- API
- A way for two software systems to exchange data automatically, such as your PMS sending availability to a channel manager.
- Channel manager
- Software that keeps rates and availability in sync between your PMS and online booking sites, so a room booked on one site closes on the others.
- City ledger
- Accounts receivable for balances owed by companies or other parties rather than by in-house guests, such as corporate accounts billed monthly.
- Deposit
- Money collected in advance to secure a reservation or cover incidentals, held on the guest's folio until it is applied or refunded.
- Extended stay
- Stays of several nights to several months, often billed weekly or monthly, common with traveling workers, relocations, and insurance placements.
- Folio
- The running account of charges and payments for a guest or reservation. The guest's bill is printed from the folio.
- Guest ledger
- The combined balances of all guests currently in-house, before charges move to the city ledger or are paid.
- Housekeeping status
- The condition of each room, such as clean, dirty, inspected, or out of order, used to decide which rooms can be assigned.
- Length of stay (LOS)
- The number of nights in a reservation. Many hotels price or restrict bookings by length of stay.
- Night audit
- The daily closing process that posts room charges, balances the books, and rolls the system to the next business day.
- No-show
- A guest with a reservation who doesn't arrive and doesn't cancel. Hotels often apply a no-show charge per their policy.
- Occupancy rate
- Rooms sold divided by rooms available for a period, shown as a percentage.
- OTA (Online Travel Agency)
- Third-party booking sites such as Expedia or Booking.com that sell hotel rooms, usually for a commission.
- Out of order (OOO)
- A room that can't be sold, typically for repairs, and is removed from available inventory until it's fixed.
- PCI DSS
- The Payment Card Industry Data Security Standard, a set of security requirements for any business that stores, processes, or transmits card data.
- PMS (Property Management System)
- The core software a hotel runs on: reservations, room status, check-in and check-out, billing, and reporting.
- Prorate
- Charging a partial amount for a partial period, such as billing part of a weekly rate when a guest leaves mid-week.
- Rate plan
- A defined price and set of conditions for a room, such as a nightly rate, a weekly rate, or a corporate rate.
- RevPAR (Revenue per Available Room)
- Room revenue divided by rooms available for a period. It combines occupancy and rate into one number. RevPAR also equals ADR × occupancy rate.
- SOC 2
- An audit framework for how a service organization protects customer data. A SOC 2 Type II report covers how controls operated over a period of time.
- Tokenization
- Replacing a card number with a stand-in token, so the actual card data is stored by the payment processor instead of your systems.
- Walk-in
- A guest who arrives without a reservation and is checked in on the spot.
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