August 20, 2019
Revenue Management Terms and Acronyms Explained
At Rented, we’ve spent the last year talking about Revenue Management Services with our clients. Many of them have the same question, “What do all these terms mean?”
Here’s a list to get started.
The data that is stored in your system of record, typically this is your property management system
Removes owner nights and maintenance holds. Of the nights available to sell, how much has been sold?
Average Daily Rate (ADR)
The calculated average nightly rate for a property or group of properties. Calculated by dividing the total rental revenue by total nights sold.
The number of days between when the reservation is made in advance of arrival.
The percentage of reservations that canceled prior to arrival
The number of guest stays for check-ins during a given period that canceled prior to arrival.
Dynamic pricing is a customer or user billing mode in which the price for a product frequently rotates based on market demand, growth, and other trends.
Total nights reserved by guests for a given period. Also referred to as Properties Sold or Nights Sold.
Revenue that was unlikely to be realizes without a certain action
Key Performance Indicators (KPI)
A business metric used to evaluate factors crucial to the success of an organization (e.g. ADR, Occupancy Rate, Conversion Rate, and RevPAN).
The percentage of total available nights that have been rented for a property or a group of properties over a specified time period. 2. The percentage of all rental units that are occupied or rented at a given time.
Also known as Room Supply. The total nights available to book for guests including existing guest reservations and nights that remain open (Open Nights).This is calculated as the total nights in the period minus owner nights and hold nights (Unavailable Nights).
Referred to as Revenue Per Available “Room” with hotels. RevPAR is calculated by multiplying the Occupancy by the ADR. = Occupancy x ADR (or) Total Unit Revenue / Total Nights in a given period
RevPAR broken down by bedroom, calculates the amount of Unit Revenue earned per bedroom per night. = Unit Revenue / (Total Nights x Sum of Bedroom Count)
Sources from a third party using technology to extract data from human-readable output coming from another system. The most common in our industry are companies that scrape data from Airbnb, Booking and Expedia family sites and resell that data to managers and other interested parties.
Unit Revenue (Recognized) or Gross Rent
Rent only, no fees