Short-term rental dictionary – the most important terms and indicators
The tourism industry, like any other, has its own glossary of terms. It is a universal code for accommodation owners and tenants. Some of the mysterious-sounding abbreviations, however, are related to technical issues and rental profitability. Check if you can decipher them and how they impact your hotel reservation system.
Short-Term Rental: Not Only B&B but Also Day Rate
If you run an accommodation facility and offer short-term rentals, you are surely familiar with such terms and abbreviations as B&B, Single Room, Check-in or Overbooking. You probably use them to promote your property among foreign tourists and to describe reservation details (although it must be admitted that these terms have also become established in the Polish language). However, at this point, two concepts should be distinguished that can make your hotel reservation system, whether in an apartment or a guesthouse, heat up to red. We are talking about Day Rate and Passant.
The first term, Day Rate, means a fee for using an accommodation facility during the day, within designated hours. Passant, on the other hand, is a guest who uses the services of a given facility but does not stay overnight. This type of service works perfectly in large cities and facilities located close to airports or railway stations. Many people are not looking for an overnight stay in a given place but simply for a place where they can, for example, freshen up after a trip and prepare for a conference or a transfer to another flight. If you decide to introduce this type of service, you can fill gaps in your reservation system and gain an additional cash injection. To assess whether the service is profitable, you also need to take into account, among other things, the costs of preparing the place and cleaning, but in many cases, it is a good choice.
Something that certainly attracts tenants is any promotions and limited-time discounts. Best Available Rate (BAR) is the best price offer for a room on a given day, allowing you to stand out from the competition. Its introduction may be associated, for example, with the necessity of prepayment for accommodation, but in the final calculation, it pays off both for the tenant and for you.
Accommodation Reservation System and statistics: ADR, RevPAR and Others
If you want your accommodation facility to generate profits, you must respond on an ongoing basis to what is happening in the market. Analyze competitors’ behavior, customers, trends, as well as statistics related to your own facility. For your hotel reservation system, or accommodation in another type of short-term rental facility, to show good occupancy, you simply need good numbers. All statistics will be provided by a comprehensive calendar application, but here too, knowledge of industry terms will come in handy. The profitability indicators of an accommodation facility are linked to abbreviations such as OCC, ADR or LOS.
OCC
OCC (occupancy) is simply the occupancy rate in your facility. How to calculate occupancy in a hotel or guesthouse? Divide the number of occupied rooms by the number of available rooms and multiply the result by 100%.
ADR
ADR (average daily rate) is the average daily room rate. Divide the room revenue on a given day by the number of rooms sold.
LOS
LOS (length of stay) is the average reservation length. Divide the sum of nights in sold reservations by the number of reservations.
RevPAR
RevPAR (revenue per available room) is revenue per available room. How to calculate REVPAR? Divide the room revenue over a given period by the number of available rooms during the same period. Another method is to multiply ADR by the occupancy rate (OCC).
TrevPAR
TrevPAR (total revenue per available room) is the total revenue of the facility per available room. The indicator is calculated by dividing the facility’s total revenue from room sales by the number of available rooms in a given period.
LC
LC (labor cost) is labor costs. In this case, you divide personnel costs by sales revenue, and the obtained result is multiplied by 100%. It is worth adding that personnel costs include not only wages and social benefits but also, among others, bonuses or perks.
Booking Window
Booking Window shows the reservation lead time. This indicator shows how far in advance the reservation was made (the difference in days between the reservation date and the guest’s check-in date) and allows you to adjust accommodation prices during periods of increased demand, thus increasing the facility’s income.
Reservation Calendar App and a Valuable Source of Statistics
Today, pencil and paper sheets are replaced by automatic calculations of the above indicators by the latest accommodation reservation systems. To efficiently manage your facility, monitor the effects of your actions, and plan future marketing and other steps, reach for comprehensive tools. The BedBooking calendar app has been equipped with a statistics section. Thanks to it, you can check financial reports, the overall income of the facility, or, for example, income from additional services at any time. You can analyze the Booking Window, the number of reservations (including cancellations), ADR, RevPAR, and even the origin of reservations, meaning from which sales channel you gained the most customers. Compare statistics and clear charts and make decisions based on hard evidence – numbers.
The BedBooking calendar app is also available with a free 30-day trial. Try it now and see how the analyzed abbreviations and indicators can help you achieve better profitability for your facility.
