Hotel and PMS glossary

The percentage of available rooms sold over a given period. Rooms out of order are normally excluded from rooms available.

Formula

Rooms sold ÷ rooms available × 100

Example

A 40-room hotel with 30 rooms sold for the night has an occupancy rate of 75%. Over a 30-day month, 900 room nights sold out of 1,200 available is also 75%.

One room sold, or available, for one night. Occupancy, ARR and RevPAR are all calculated in room nights.

Formula

Rooms × nights

Example

A 40-room hotel has 40 room nights available each night and 1,200 in a 30-day month. Two guests staying three nights each account for 6 room nights sold.

The average room revenue earned per room night sold. ARR is the term most used in India; ADR is the international equivalent and is calculated the same way.

Formula

Room revenue ÷ room nights sold

Example

30 room nights sold for ₹90,000 of room revenue give an ARR of ₹90,000 ÷ 30 = ₹3,000.

Room revenue divided by all room nights available, sold or unsold. Because it reflects both rate and occupancy, it is the standard measure for comparing room revenue across properties and periods.

Formula

Room revenue ÷ room nights available, or ARR × occupancy rate

Example

₹90,000 of room revenue across 40 available rooms gives a RevPAR of ₹2,250, equal to an ARR of ₹3,000 × 75% occupancy.

Total revenue from all departments, including rooms, food and beverage, banqueting and other services, divided by room nights available. It measures what a property earns per room beyond accommodation alone.

Formula

Total revenue ÷ room nights available

Example

A month with ₹27,00,000 of room revenue and ₹6,00,000 from food, beverage and banqueting gives a TRevPAR of ₹33,00,000 ÷ 1,200 = ₹2,750.

Gross operating profit, meaning total revenue less operating expenses and before fixed charges such as rent, interest, depreciation and tax, divided by room nights available. It is widely used to compare the profitability of hotels.

Formula

Gross operating profit ÷ room nights available

Example

Total revenue of ₹33,00,000 less ₹21,00,000 of operating expenses leaves a gross operating profit of ₹12,00,000, a GOPPAR of ₹12,00,000 ÷ 1,200 = ₹1,000.

Revenue earned from the sale of rooms, after discounts. It is recognised on the night the room is occupied, regardless of when payment is received.

Formula

Room rate × room nights sold − discounts

Example

A three-night stay at ₹3,000 a night with a ₹1,000 discount contributes ₹8,000 of room revenue across the three nights of the stay, even if it was paid in advance.

The average number of nights per stay over a given period.

Formula

Room nights sold ÷ number of stays

Example

120 stays accounting for 300 room nights give an average length of stay of 2.5 nights.

The number of days between the date a booking is made and the guest’s arrival date. Lead time patterns inform pricing and promotional decisions.

Formula

Arrival date − booking date

Example

A booking made on 1 March for arrival on 15 March has a lead time of 14 days.

The rate at which bookings for a future date accumulate, usually compared with the same point in a previous period. Pickup is the number of rooms booked for that date during a recent interval.

Formula

Rooms booked for a date today − rooms booked for the same date a week earlier (weekly pickup)

Example

For 25 December, 22 rooms are booked today against 14 a week ago: a pickup of 8 rooms in seven days.

The number of bookings received during a period, counted on the date the booking was made rather than the date of stay.

Example

A booking received today for a stay next month counts towards today’s bookings made; its room nights count towards next month’s occupancy.

The percentage of bookings that are cancelled before arrival. Some properties include no-shows in this figure; others report a separate no-show rate.

Formula

Cancelled bookings ÷ bookings made × 100

Example

If 16 of 200 bookings made in a month are cancelled, the cancellation rate is 8%.

The average occupancy rate for each day of the week over a recent period. It shows whether demand is driven by weekday business travel or weekend leisure travel.

Formula

Rooms sold on a given weekday ÷ rooms available on that weekday × 100, averaged over the period

Example

Average occupancy over 90 days of 82% on Saturdays and 48% on Tuesdays indicates leisure-led demand.

The route through which a booking is received, such as the property’s own website or booking engine, telephone, walk-in, a corporate account or an online travel agency. Channel mix is the share of bookings or revenue from each channel.

Example

Of 200 bookings in a month, 30 come through the booking engine, 40 by telephone, 20 as walk-ins, 20 from corporate accounts and 90 through OTAs.

The percentage of bookings made directly with the property, through its website, booking engine, telephone or front desk, rather than through an intermediary. Direct bookings carry no OTA commission.

Formula

Direct bookings ÷ total bookings × 100

Example

If 90 of 200 bookings arrive through the booking engine, telephone and front desk, the direct booking share is 45%.

The percentage of bookings received through online travel agencies (OTAs): online marketplaces such as MakeMyTrip, Booking.com and Agoda that sell rooms in return for a commission.

Formula

OTA bookings ÷ total bookings × 100

Example

90 OTA bookings out of 200 is an OTA share of 45%.

The fee an OTA charges for each booking it delivers, usually a percentage of the room tariff. Rates vary by OTA, market and contract, commonly between 14% and 29%.

Formula

Room tariff × commission rate

Example

A ₹3,000 night at 18% commission costs ₹540 in commission.

The total an OTA deducts, including commission, taxes withheld and other charges, as a percentage of the amount the guest paid. It is typically higher than the headline commission rate.

Formula

Total OTA deductions ÷ amount paid by guests × 100

Example

Guests pay an OTA ₹1,00,000 and the OTA remits ₹78,000 to the hotel: an effective commission rate of 22%.

The amount an OTA remits to a hotel for a stay after deducting commission, taxes withheld and other charges.

Formula

Amount paid by the guest − OTA deductions

Example

On a ₹10,000 booking, an OTA deducts ₹2,000 in commission and taxes withheld and remits a net payout of ₹8,000.

Taxes an OTA deducts from its payout and deposits with the government on the hotel’s behalf: TCS (tax collected at source) under GST and TDS (tax deducted at source) under income tax. Both are credited to the hotel, which claims TCS in its GST returns and TDS against its income tax liability.

Example

If an OTA statement shows ₹600 withheld for a month, the hotel recovers that ₹600 when it files its returns; it is not a cost of the booking.

Commission owed to an OTA on bookings for which the guest paid the hotel directly. The OTA invoices it or deducts it from a later payout.

Formula

Room tariff × commission rate

Example

A guest who booked through an OTA pays ₹5,000 at the hotel; at 18% commission the hotel owes the OTA ₹900.

The running account of a guest’s stay, recording every charge, such as room nights, extras and taxes, and every payment, discount and refund in date order.

Example

A two-night folio may show two nights at ₹3,000, an extra bed at ₹800, an advance of ₹2,000 and a payment of ₹4,800 at check-out, for a balance of ₹0.

The amount remaining on a folio, invoice or account: the bill, meaning total charges after discounts, less the amount paid after refunds. A negative balance is a credit due back to the guest.

Formula

Bill − Paid

Example

A bill of ₹10,000 with ₹6,000 paid leaves a balance of ₹4,000. A balance of −⁠₹500 means the guest has paid ₹500 more than the bill.

All payments collected in a period, by any payment method, before refunds.

Example

₹45,000 collected in cash and ₹30,000 by UPI in a day is ₹75,000 of payments received.

Money returned to a guest, for example after a cancellation within the cancellation policy or a payment in excess of the bill.

Example

A guest who cancels within the free-cancellation period receives a refund of the ₹6,000 advance paid.

A reduction in the amount charged. It lowers the bill and the revenue recognised; no payment is involved.

Example

A ₹1,000 discount on a ₹9,000 stay reduces the bill to ₹8,000.

Costs incurred in running the property, such as supplies, repairs and maintenance, utilities, vendor services and petty cash.

Example

A month’s expenses may include ₹18,000 for linen, ₹9,500 for repairs and ₹4,200 in petty cash.

The cash received in a period less the cash paid out in refunds and expenses.

Formula

Payments received − refunds − expenses

Example

₹7,50,000 received, less ₹12,000 in refunds and ₹95,000 in expenses, is a net cash flow of ₹6,43,000.

Amounts owed to the property: guest balances unpaid at check-out, unpaid corporate invoices and OTA payouts not yet received.

Example

A guest who checks out with ₹1,200 unpaid adds ₹1,200 to dues until it is collected.

A payment received before the nights it covers, such as a deposit taken at the time of booking.

Example

A guest pays ₹6,000 today for two nights next week: an advance received of ₹6,000.

An advance applied against the charges it was paid for, when those nights are stayed.

Example

When the guest stays, ₹3,000 of the advance is adjusted against each of the two nights.

Payments received for charges from earlier dates, such as a balance left at check-out or a corporate invoice.

Example

A company pays ₹45,000 against the previous month’s invoice: ₹45,000 of dues received.

A payment received in excess of the amount billed, held as a credit or refunded. It commonly occurs when a guest pays at the hotel for a booking already prepaid through an OTA.

Example

A guest whose ₹3,000 night was prepaid to an OTA pays a further ₹3,000 at check-in: ₹3,000 of excess received, to be refunded.

A billing arrangement in which the charges for a stay are invoiced to a company rather than paid by the guest, usually on monthly credit.

Example

An employee of a client company stays four nights at ₹3,500; the ₹14,000 is added to the company’s monthly invoice.

The operating cost of the rooms department, including housekeeping labour, linen, guest amenities and utilities, divided by the number of room nights sold.

Formula

Rooms department costs ÷ room nights sold

Example

₹2,70,000 of rooms department costs over 900 room nights sold gives a CPOR of ₹300.

GST on hotel accommodation in India is charged on the value of one room for one night, before tax. Since 22 September 2025 the rate is 5% up to ₹7,500 and 18% above it, split equally between CGST and SGST.

Formula

Up to ₹7,500 per night: 5%. Above ₹7,500: 18%.

Example

A ₹4,000 night attracts ₹200 of GST (₹100 CGST and ₹100 SGST); a ₹9,000 night attracts ₹1,620.

Standard codes for the meals included in a room rate: EP (European Plan), room only; CP (Continental Plan), with breakfast; MAP (Modified American Plan), with breakfast and one main meal; AP (American Plan), with all three meals.

Example

A room priced at ₹3,000 on EP may be sold at ₹3,400 on CP, including breakfast for two.

Guests due to check in on a given day.

Example

With 12 arrivals expected and 3 checked in by noon, 9 rooms must be ready for the remaining arrivals.

Guests due to check out on a given day.

Example

10 departures by an 11 AM check-out time leave 10 rooms to be cleaned before the afternoon’s arrivals.

Guests who have checked in and are currently staying at the property.

Example

At 10 PM, 26 rooms are in-house: their guests have checked in and not yet checked out.

A guest who arrives without a prior booking and is accommodated the same day.

Example

A traveller who requests a room at the front desk at 9 PM and checks in immediately is a walk-in.

A guest with a confirmed booking who neither arrives nor cancels. Any charge depends on the property’s cancellation and no-show policy.

Example

A guest booked for 14 March neither arrives nor cancels; the booking is recorded as a no-show and the room is released for sale.

A guest who remains in the room beyond the booked departure date without an extension of the stay.

Example

A guest due to depart on Monday who is still in residence on Tuesday morning is an overstay.

Accepting more bookings for a night than there are rooms available, sometimes deliberately to offset expected cancellations and no-shows.

Example

A 40-room hotel holding 42 bookings for the same night is overbooked by 2 rooms.

The condition of a room for sale and occupancy: vacant and clean (ready), vacant and dirty, occupied, or out of order (withdrawn from sale for repair or maintenance).

Example

After 11 AM check-outs, eight rooms change from occupied to vacant and dirty; housekeeping returns them to vacant and clean before the afternoon’s arrivals.