Acceptable Cost

Estimated cost that can best meet the expectations of the client. The cost, of course, is higher in facilities where clients have greater financial means.

Acid Test – AT

It is an index given by the ratio of the sum of immediate liquidity (IL, represented by current liabilities) and immediate and deferred liquidity (DL), over the current liabilities (CL). The acid test indicates the ability to meet short term financial commitments....

Advance Booking – ADV

Although the restriction of having to reserve a certain number of days before the stay date (the number of days may vary, usually up to 45/30/15, etc., and is established according to the principal segment of the hotel’s clientele and habitual reservation practices) a...

Advance Booking Forecast Model

Forecasting models of demand based on the increase in time of reservations => pickup. The arrival date for which the forecast is made is constituted by the “business on the book” (the number of reservations received until today) to which an estimated number of...

Agreement

The etymological derivation of this word is from the Latin ad gratum, via the Old French agrément. The English word is reported in the best Italian dictionaries with the obvious meaning of approval, consensus and agreement. In the tourism industry the word agreement...

Allocation

Term which refers to the estimate, because based on a forecast, allocation of inventory units (rooms, seats, etc.) for those left-over tariff classes after last room value operations. Allocation allows the highest possible...

Allotment – ALL

A contract between a business client (Tour Operator, Online Travel Agency or company) and an accommodation facility (hotel, apartment house, bed & breakfast., etc.). The object of the contract, negotiated annually, is a certain number of rooms (a quota or...

Amadeus

Amadeus was founded in 1987 by Air France, Iberia, Lufthansa and SAS as an alternative to the American GDS. Amadeus coordinates the search, pricing, reservation and issue of tickets, inventory management and departure control systems. As of 31 December 2012 the...

Ancillary Revenue

Revenue derived from the sale of supplementary services which are not the core business but which are directly connected to the product/service acquired (e.g. spa treatments, catering, pay-tv, excursions, etc.). The trend is to seek to maximize not only room revenue...

Arrivals

Number of rooms or clients who arrive in the hotel on a fixed date or period.

Attendance

Number of occupied rooms or customers in a hotel on a date or in a period of time.

Average Daily Rate – ADR

This index is used to calculate the average price of a daily sale.  Average Daily Rate is rooms revenue earned divided by number of rooms sold. ADR may also be used to evaluate segments/markets/types of rooms. It is well-known that the business segment has average...

Average House Rate – AHR

see Average Daily Rate Average Price Average of the rates of the occupied rooms in a hotel or the prices of an inventory.

Average Rate Index – ARI

Indicates the penetration of the market of reference in terms of average tariff rate. (Hotel Average Room Rate / Competitive set Average Room Rate) x 100. This index, if equivalent to 100%, indicates that sales, on average, are at the same tariff as competitors; if it...

Average Room Cost – ARC

Average total costs per room. It is calculated by dividing all costs by the number of rooms sold in the same period. The costs which are attributable to specific areas (if, for example, the reception is not reserved only for hotel guests but may also be used by...

Average Stay

Ratio between number of nights spent (attendance) and number of customers arrived (arrivals).

Bed & Breakfast – B&B

A type of service which comprises overnight stay and breakfast the following morning. The term may also refer to a particular non-hotel establishment offering this type of service.   

Best Available Rate – BAR

The best tariff available online. By convention this often does not correspond to those with the lowest price but rather to those with the lowest tariff with conditions concerning cancellations, refunds and payment in...

Best Flexible Rate – BFR

The best available tariff among products with flexible tariffs, in other words, those without restrictions.

Bid Price

The price (economic value) below which it is not worthwhile selling a product (room, seat, car, etc.) for a certain day or period because it is estimated that there will be other requests at prices equal to or higher than the Bid Price....