Key Terms- Glossary for Food Production & Front Office( 5th & 6th Semester): Front Office Glossary & Front Office abbreviation .

Front Office terminologies are very important to know by all the students who are graduating and would like to pursue in Front Office Department as their choice of career .

The following terms are referred from the " Front Office Management - S K Bhatnagar", text book. My friend & colleague Stephan Almeda is always a great help as we both are from the same stream - Front Office. Thanks to you Stephan.

A la carte:   It is a type of menu which lists all the dishes available in the restaurant and each dish is priced individually.

Access Time: The time interval between when data are called for or requested to be stored I in storage device and data goes to storage after use. Read and write time.

Account payable transaction: A financial procedure in which goods and services are received by the hotel before the hotel makes payment for them.

Account posting machine: A device used to post, monitor and balance charges and credits to guest account.

Ageing statement: A statement which shows how old the unpaid account has become.

Account receivable load: Out of the total sales, that proportion of sales that are charged f to accounts, and which are to be collected on later dates.

Account receivable transaction: A financial procedure in which goods and services are    provided to the consumer for which the payment shall be received in future. The consumer may be an individual or a company or an organization.

Account settlement: The payment of outstanding balance on the folio or city account by the consumer, either by cash or by credit (i.e. an agreement of the amount of outstanding bill at a later date).

Accountancy cycle: A period (can be daily, weekly, monthly, or yearly) from when a financial transaction occurs to the time it is reconciled and is shown on the financial report of the company.

Accounting system: A system of accounting for recording, analyzing and summarizing the financial transactions of the company.

Accounts receivable ledger: A ledger of the aggregate of individual account    receivable records.

Account: The way of first classifying and then summarizing of money transactions within the framework of an accounting system is called account.

Arrival/Departure report: A list of all the check-ins and check-outs of a day.

Adds: Last minute reservations added to the list of expected arrivals on the day of arrival.

Adjoining rooms: An adjoining room shares a wall with another room but there is no inter connecting door.

Advance deposit: An amount of money that is sent by the prospective guest in advance generally deposited in the guest account. Also called as deposit reservation. This cash is in anticipation to cover the estimated use of hotel services/product. Also called as "Anticipated Usage Amount".

Advances: Any money disbursed for guests such as loans or payments made on behalf of the guests. This amount is charged to the account like other charges. Also called as cash paid out or cash disbursement.

Affiliate reservation network: A hotel chains reservation system in which all participating properties are contractually related.

Affiliated hotel: A hotel which is usually on franchise or referral system of another group or chain.

After departure: Also called as late charge and refers to any credit purchase money voucher which reaches the bills section after the guest has settled his bill and checked out. This requires late charge billing.

Agent: Does not stock. Sells the goods on commission basis.

Agency ledger: That section of the city ledger where the travel agency transactions / accounts are recorded.

Alphabetical Rack/Alpha Rack/Alphabetical Index: A Whitney rack which is arranged in alphabetical order and to arrange on the reception counter. This is also called as Information Rack.

Allocatable expenses: All those expenditure that can be classified or shared amongst various departments of the company.

AIDA: A management term refering to marketing management and the abbreviation stands for "Attention", "Interest", Desire and "Action".

Allowance: An accounts term which refers to the amount which is reduced from the guest folio as an adjustment against improper, unsatisfactory or no service to the guest. It may also be due to a posting error. Also called as account allowance.

American plan: AP is also known as en-pension (full board). The tariff includes room rent and all meals (i.e. breakfast, lunch & dinner).

Arranging:A data processing function whereby data are sorted in a predetermined Sequence.

Arrival date: A date when a prospective guest is expected to arrive in the hotel.

Arrival time: The expected time of arrival of a prospective guest.

Arrival, departure and change sheet: A consolidated document prepared and maintained by the front desk staff recording all the arrivals, departures and change of rooms. In some hotels three separate sheets are maintained for each of these activities

Attitude: An attitude is a learned tendency to respond to a given product in a particular way. Attitude has three components, (a) the cognitive, (b) the affective and (c) the behavioral.

Audit: The review, test and verification of financial transactions in an accounting system.

Audit trial: Serves as documented history of transactions.

Authorization approval code: It is the authorization approval by credit card company for the extension of credit limit facility in case the credit card holder's credit is about to exceed the assigned floor limit.

Available rooms: The number of rooms that the hotel has for sale out of the total number of rooms in the hotel. This figure may vary each day.

Above the line: Promotional expenditure aimed at consumers, for example advertising as opposed to below the line 'expenditure, aimed at sales channels such as times to salesman'

Average rate per guest: It is the average of the revenue earned per guest by the hotel for an accounting period. For example, average rate per guest for a day will be equal to the total room revenue collected for the day divided by the total number of guests accommodated for that day.

Average room rate/revenue: It is the average money collected from the sale of total number of rooms by the hotel for an accounting period. For example the average daily room rate is equal to total room revenue collected for a day divided by the total number of rooms sold for that day. This average is also referred to as sales per room occupied.

Back office: It is that branch of the hotel which is responsible for coordinating all support services. All managerial activities and maintaining the ongoing status of the business and their activities are called back office functions. Department that usually don't come in direct contact with the guest. Also called Back of the House.

Back to back: A travel trade term which refers to a sequence of consecutive group departures and arrivals, usually arranged by tour operators so rooms are never vacant i.e. a manner of operating tourists on a consistent and continuous basis. OR Heavy Check–in & Checkout takes place at the same time/day.

Back-of-the-house: The areas and sections of the hotel with which normally the hotel resident guest does not come in direct contact.

Bag Delivery: The process of delivering the luggage of group members to individual group member’s room after the group has check in to the room.

Bag Pull : Process of bringing down the luggage of the group members from their rooms to lobby on the day of departure of the group just before the departure.

Bal. : Balance.

Balance sheet: A statement of the financial position of the company at a specific time, showing the position of assets, liabilities and equity of the company.

Bank: Refers to the petty cash or float/imprest money given to cashier for making day-today small payments such as V.P.O. etc.

Bed and breakfast: B&B consists of room rent and American breakfast (two eggs- fried or poached, sliced bacon or sausages, sliced bread or toast with jam/jelly/butter, pan cakes with syrup, cornflakes or other cereal, coffee/tea, orange /grapefruit juice.

Bed board: Usually a hardboard provided on the bed on special request of the guest.

Bed occupancy: A ratio of number of beds sold to number of rooms available for sale. When the ratio is multiplied by 100 the figure obtained is bed occupancy percentage. Also called as guest occupancy.

Beliefs: It is the last stage of learning i.e. a process by which people acquire the knowledge and experience that they apply to buying and using product.

Bell captain: Also called as hall porter and in charge of bell desk staff i.e. uniformed staff.

Bell desk/bell stand: The bell desk is a special desk located in the lobby from where the senior bell captain operates with his team. Also called as "porters' lodge."

Bell persons/boys slip: This is a slip which is prepared to communicate to the bellboy about the room of the guest which has requested for bell service.

Bell cart: A luggage trolley used to carry luggage to and from the guest room by the bell boy. Also called "Bell Hop trolley".

Bench mark: A test or set of tests for assessing the performance of a computer programme.

Break even point: A point at which neither a profit nor loss is incurred and the revenue is just sufficient to meet the total of fixed and variable costs.

Bermuda plan: A type of meal plan where the room tariff includes along with room rate the American breakfast rates.

Bill to account: This situation refers to the case when the unpaid bill or guest's account is transferred to a non-guest ledger for billing (of course approval of both parties  necessary).

Breakage: If an individual guest or a group does not avail of some services or amenities such as meals/food included in the package then the gain which accrues to the hotel is called breakage.
Bundling: Making a package of two or more hotel products/services to be offered to a guest at a package rate.

Bumped reservation: Refusal of accommodation to a guest holding confirmed reservation and subsequently putting him in some other hotel.

Buyer confidence: A guest's predetermined desire to book a room at a hotel at almost any cost.

Black-listed guest: A list of unwanted guests. These may be those guests who make a lot of fuss and create problems for the hotel, (non-payment of bill, damage to hotel property, misbehave with its staff and/or other guests of the hotel etc.) FHRAI is usually informed about such guests.

Blanket reservation: A block of rooms held for a particular group with individual members requesting assignments from that block i.e. a unit that has been reserved for a specific arrival date but not for a specific guest, also referred to as blocked room.

Booked room: Also called as "Blocking". A specific room that is reserved for a specific guest.

Bounced reservation: Sometime due to some error in planning a guest with reservation may be refused accommodation.This situation is called bounced reservation situation; also called walking the guest.

Brochures : Printed stationery, containing brief description of the services and facilities in the form of coloured photographs and nicely phrased text that the hotel is offering to its prospective guests. Generally given free to various travel agents, tourist bureaus, etc. for further distribution to prospective guests. An advertisement material in the form of folders, booklets, pamphlets etc.

Brunch : A meal served between breakfast and lunch and usually served in place of these two meals.

Bucket : It is a specially designed collapsible rack which is normally kept on the cashier's counter top for holding the guest folio. It is also called as 'cashier's well' and 'folio tray' and the 'tub'.

Budget: A statement of expected/projected expenditure constructed from anticipated/ projected revenue and available financial resources for a period of time, usually one year. The process of preparing budget is called budgeting.

Brand Loyalty: The institutionalized preferences of a customer for a product/service based on a brand name or logo.

Captive audience: Those guests of the hotel who are suggested to use facilities/services other than room of the hotel either for convenience or lack of other options.

Cancellation: A process of cancelling the reservation by guest before the date of expected arrival, made previously by him.

Cancellation code: A code number assigned to cancelled reservation to future references and a document listing all such cancellation codes is called cancellation record. Also a record or list of all guests who cancelled their reservation is called cancellation report.

Card key: An electronic or magnetic small plastic card used in electronic locking system that operates through a master control console at front desk which is wired to every guest room door. Also called as magnetic or electronic card.

Cash discount: An allowance offered by a creditor or debtor to encourage prompt payment.

Cash flow: It is the time period between the goods or service sold to a customer to the period actual cash for that sale is received.

Cash payout transaction: A cash transaction in which the hotel makes cash advance to a guest or non-guest account.

Cash register: A device used to record and maintain cash balances. The device may be mechanical, semi-automatic or automatic or electronic.

Cash sheet: A document in report form prepared by cashier, carrying all transactions against folio accounts, cash payouts, and departmental cash sales. This document serves as a primary cross-reference document in the hotel's audit.

Cash transaction: An exchange of goods or services for cash.

Casino hotel: A hotel with gambling facilities.

Chamber maid: A housekeeping staff normally responsible for cleaning of rooms and bed making.

Chance guest: A guest who comes without reservation and requests for a room (also call Walk In).

Chance trade: Business done usually for cash with chance guests.

Change: Moving a guest from one room to another for various reasons.

Charge back: Sometimes the credit card company refuses the payment of a voucher signed by the customer which is sent by the hotel. This situation is called charge back.

Chartered Flight: This is a special arrangement in which the airlines book a flight from one destination to another for the exclusive use of a group of persons who normally belong to the same organisation or by a travel agent for his group. These are normally much cheaper to regularly scheduled flight and are usually in supplement to the regular flight.

Check-in: Procedure of receiving the guest, assigning and allocation of room and

registering of a guest in the hotel.

Cognitive Dissonance : Customers experience some anxiety over the choice which they have made that perhaps one of the competitors, offering might have been a better choice. A conflict between two internally held values. "I am a sensible person but I have made a foolish purchase".

Check-out: The procedure involved (baggage handling, bill settlement etc.) at departure time.

Check-out time/hours: It is the time by which the guest should check-out otherwise next day's charges will be charged. Usually it is 12.00 noon.

City account: Basically an account receivable for someone other than a registered guest.

City ledger: In hotel accounting, the city ledger is the collection of accounts belonging to non-registered guests. This is distinct from the transient ledger (or front-office ledger, or guest ledger), which is the collection of accounts receivable for guests who are currently registered.

Cleaners: Members of housekeeping department who clean public areas such as corridors.

Close of the day: An arbitrary hour fixed by the hotel which separates the record of one day from the next day.

Closed: Dates for which a reservation system will not accept additional reservation.

Closet bed: A standard size bed that swings into a wall or cabinet in the form of a closet can accommodate one or two persons and simple removal from floor area as they are built into a closed wall.

Commercial hotels: A hotel which is mainly patronized by businessmen and situated downtown usually.

Commercial rate: Special discounted rate offered to a frequently visiting hotel guest.

Commission: Amount payable to travel agents for arranging groups stay in the hotel.

An amount payable to an agent, usually based on business given to hotel.

Commissionaire: Member of uniformed staff whose place of duty is outside the main entrance of hotel. Also called door man, link man and carriage attendant.

Core Competency: Refers to the strengths of the hotel.

Commissioned sales: Materialized business given to the hotel by a third party such as travel agent for which the hotel has to pay commission to the third party.

Competitive price: Construction of room tariff based on the rates of the competitor. In this case the rate fixation is based on external rate structure criterion, rather than the inter-rate structure criterion.

Conversion Ratio: The number of transient booking made versus the number of calls received.

Complimentary: Usually accommodation given to a guest free. Generally abbreviated forms ‘comp', is used. A business promotional or goodwill activity. Complementary rooms are given by the hotel.

Computer system: An electronic system which comprises of an input-output device, a central processing unit and a memory unit called as hardware or the physical components and the programme and the instructions used called as software. This total system is used to either problem solving and or data processing functions.

Concessionaire: Abbreviated as concession sometimes refers to the shops providing services and amenities and facilities etc. to the resident guest. Generally they are not operated by the hotel, and are rented to experts. These are also called as rentals.

Conducted Tour : It is a group tour in which right from the beginning of the tour to the end there is a conductor who accompanies the group and looks after the ground and other arrangements which are incident during the tour. Also called as escorted tour and managed tour.

Compression of demand: The theory that the need for hotel rooms in a city or geographical area will remain constant in spite of what the occupancy level is. If one part of the area is sold out the demand for rooms will compress in such a way as to drive those looking for rooms elsewhere.

Concierge: A person usually found in American hotels responsible for providing guest services and needs etc. In some hotels concierge provides information service to guest also.

Cold calls: Sales calls on customers with no previously identified interest in a product.

Customers Profile: This summarizes the characteristics of Hotel Guest. This is used to assist in product formulation and in directing advertising and sales promotion.

Confirmation notification: Also called as acknowledgement letter. Sometimes means the letter or other mode of communication such as phone, letter etc. by which the prospective guest (who has requested for room reservation) is informed of the acceptance of his request.

Terms for Front office for 5^th & 6^th Semester

Average daily rate - an occupancy ratio derived by dividing net room’s revenue by the number of rooms sold.

Average rate per guest – an occupancy ratio derived by dividing net room’s revenue by the number of guests.

Competitive set – the competitive group of hotels in a market that are the most important competition for a hotel.

Daily operations report – a report, typically prepared by the night auditor, that summarizes the hotel’s financial activities during a 24-hour period and provides insight into revenues, receivables, operating statistics and cash transactions related to the front office; also known as the manager’s report.

Forecasting – the process of predicting events and trends in business; typical forecasts developed for the rooms division include room availability and occupancy.

House count – the forecasted or expected number of guests for a particular period, sometimes broken down into group and non-group business.

Hubbart Formula – a bottom-up approach to pricing room; in determining the average price per room, this approach considers costs, desired profits, and expected room sold.

Income statement – a financial statement that provides important information about the results of hotel operations for a given period of time.

Market condition approach – an approach to pricing that bases prices on what comparable hotels in the geographical market are charging for a similar product.

Multiple occupancy percentage – the number of rooms occupied by more than one guest divided by the number of rooms occupied by guests.

Multiple occupancy ratio – a measurement used to forecast food and beverage revenue, to indicate clean linen requirements, and to analyze daily revenue rate; derived from multiple occupancy percentage or by determining the average number of guests per room sold; also called double occupancy ratio.

Occupancy percentage – an occupancy ratio that indicates the proportion of rooms sold to rooms available for sale during a specific period of time.

Occupancy ratio – a measurement of the success of the hotel in selling rooms; typical occupancy ratios include average daily rate, revenue per available room, average rate per guest, multiple occupancy statistics, and occupancy percentage.

Operating ratio – a group of ratios that assist in the analysis of hospitality operations.

Overstay – a guest who stays after his or her stated departure date.

Rack rate – the standard rate established by the property for a particular category of rooms.

Revenue per available customer (Rev PAC) – a revenue management measurement that focuses on revenue per actual guest.

Revenue per available room (Rev PAR) – a revenue management measurement that focuses on revenue per available room.

Room rate variance report – A report listing rooms that have not been sold at rack rates.

Rule-of-thumb approach – a cost approach to pricing rooms; using this approach, the room rate is set at Re.1 for each Rs.1,000 of construction and furnishings cost per room, assuming an occupancy of 70 percent.

Stayover – a room status term indicating that the guest is not checking out today and will remain at least one more night; a guest who continues to occupy a room from the time of arrival to the state date of departure.

Understay – a guest who checks out before his or her stated departure date.

Yield statistic – the ratio of actual rooms revenue to potential rooms revenue.

Achievement factor ¾ the percentage of the rack rate that a hotel actually receives; in hotels not using revenue management software, this factor is generally approximated by dividing the actual average room rate by the potential average rate.

Booking lead time ¾ a measurement of low far in advance bookings is made.

Break even analysis ¾ an analysis of the relationships among costs, revenue, and sales volume allowing one to determine the revenue required to cover all costs; also called cost-volume-profit analysis.

Close to arrival ¾ a yield management availability strategy that allows reservations to be taken for a certain date as long as the guest arrives before that date; for example, a hotel may accept a reservation for a Wednesday night if the guest’s actual stay begins on Tuesday night.

Contribution margin ¾ sales less cost of sales for either an entire operating department or for a given product; represents the amount of sales revenue that is contributed toward fixed costs and/ or profits.

Cost per occupied room ¾ the variable or added cost of selling a product that is incurred only if the room is sold; also called marginal costs.

Discount grid ¾ a chart indicating the occupancy percentage needed to achieve equivalent net revenue, given different discount levels.

Displacement ¾ the tuning away of transient guests for lack of rooms due to the acceptance of group business; also called non-group displacement.

Equivalent occupancy ¾ given a contemplated or actual change in the average room rate, the occupancy percentage needed to produce the same net revenue as was produced by the old price and occupancy percentage.

Fair market share ¾ a comparison of hotel’s ADR and occupancy percentage, or REV Par, against its competition to determine whether it is getting its share of business in the market.

Forecast ¾ a projection of estimated business volume.

Group booking pace ¾ the rate at which group business is being booked.

Hurdle rate ¾ in the context of revenue management, the lowest acceptable room rate for a given date.

Marginal costs ¾ the variable or added cost of selling a product that is occurred only if the room is sold; also called cost per occupied room.

Minimum length of stay ¾ a revenue management availability strategy requiring that a reservation must be for at least a specified number of nights in order to be accepted.

Potential average rate ¾ a collective statistic that effectively combines the potential average single and double rates, multiple occupancy percentage, and rate speared to produce the average rate that would be achieved if all rooms were sold at their full rack rates.

Rate potential percentage ¾ the percentage of the rack rate that a hotel actually receives found by dividing the actual average room rate by the potential average rate; also called the achievement factor.

Rate spread ¾ the mathematical difference between the hotel’s potential average single rate and potential average double rate.

Revenue management ¾ a technique based on supply and demand used to maximize revenues by lowering prices to increase sales during periods of low demand and by raising prices during periods of high demand.

Rev PAR ¾ a revenue measurement that focuses on revenue per available room.

Sell-through ¾ a revenue management availability strategy that works like a minimum length of stay requirement except that the length of the required stay can begin before the date the strategy is applied.

Stay- sensitive hurdle rate ¾ in the context of revenue management, a hurdle rate (or minimum acceptable room rate) that varies with the length of the guest reservation.

Wash factor¾ the deletion of unnecessary group rooms from a group block.

Weighted average contribution margin ratio ¾ in a multiple product situation, an average contribution margin for all operated departments that is weighted to reflect the relative contribution of each department to the establishment’s ability to pay fixed coats and generate profits.

Yields statistic ¾ the ratio of actual rooms revenue to potential rooms revenue.

Revenue Management Terms

90-day forecast a forecast extending 90 days into the future.

Action plan a calendar used for planning and assigning tasks to be completed over the course of a year.

Average daily rate (ADR). Calculated by dividing rooms revenue by the number of rooms sold.

Best available rate the lowest rate per room available to the general public on a given night.

Best-rate guarantee program that guarantees that the consumer will receive the best rate from the organization. If a consumer can find a better price than the one posted on the organization's website, the organization will match that price.

Booking pace refers to the pattern and tempo (rate) of receipt and acceptance of advanced reservations.

Brand equity the value generated by a brand.

Branding placing an identifying mark or logo on a product produced by a specific organization or associating that brand with a service performed by that organization.

Bundling combining products and services to create a package.

Cannibalization the concept of a customer leaving a higher-rated market segment to jump over a fence and gobble up lower-priced products or services offered by the same provider to other lower-rated market segments.

Capacity the amount of space that can be filled.

Central Reservation office (CRO). Automated reservations system that take reservations for all properties within an organization.

Central Reservation system also known as CRS. An automated reservation system for booking several travel components, including air, car, and hotel room.

Channel refers to the source of the booking.

Channel contribution percentage a percentage calculated by dividing the channel's total revenue by the total revenue produced by all channels.

Closed or closed out inventory is no longer available for sale.

Closed to arrival means that the customer cannot arrive on that date no matter their intended length of stay.

Competitive advantage that component of an organization's operation in which it excels or maintains an advantage over its competitors.

Competitive intelligence the practice of conducting primary research and analyzing secondary research to understand the characteristics of the competition.

Competitive set an organization's primary direct competitors. If your facility is sold out, a direct competitor would be the facility that your customer would select next.

Customer-centric approach any marketing or operational effort focused on the needs, wants, and desires of an organization's customers.

Customer Relationship Management also referred to as CRM. Strategies and tactics developed to acquire and retain customers.

Cut-off date the date that all unconfirmed reservations will be released to general inventory for resale.

Data mining the process of continually digging deeper into the data captured by a marketing intelligence system.

Decline stage the stage of the product or service life cycle in which sales of the product or service are flat or falling. Both volume and prices continue to fall. Newer products or services are competing directly for customers. Unchecked decline will ultimately lead to the death of a product or service. The producer either needs to innovate or evaporate.

Demand the amount of a good or service that a purchaser is willing and able to buy for any given price at any given time.'

Demand drainer an activity or event that causes demand to decrease.

Demand forecasting the act of estimating, calculating, and predicting consumers' demand for products and services in the future.

Demand generator an organization or event that drives customers into a marketplace. An activity or entity that produces demand.

Denial a response that occurs when a facility is not able to accommodate a guest due to unavailability of product or service at that price.

Discounting the practice of offering special reductions in price.

Distressed inventory that an organization is having difficulty selling.

Dynamic packaging a new customer-centric approach to packaging. Hospitality providers may vary the products and services bundled in a package to suit the needs of the individual consumer.

Elastic an economic term. Whenever a 1 percent change in price causes more than a 1 percent change in quantity supplied or demanded, the elasticity calculation will result in a number greater than 1. When this occurs, we say that the supply or demand is elastic. In this case, the quantity demanded or supplied is very sensitive to price.

Electronic distribution the selling of hospitality products and services via the computer. Think of these basically as electronic warehouses in which a person may conduct one-stop shopping for a variety of hospitality products and services.

Environmental scanning constantly monitoring and assessing the external environment to spot changes and emerging trends.

Extended stay business that generates seven or more nights stay.

Fair price a positive price/value relationship; a just and honest price.

Fixed costs that do not change with a change in the activity of a business. Rent is a fixed cost.

Flash report a daily report completed to recap the previous day's business.

Forecasting the act of estimating, calculating, or predicting conditions in the future.

Forecasts predictions of the future. Various time periods may be used, including short-term 3 to 5 day forecasts, 90-day forecasts, midterm forecast covering 10 to 14 days, monthly, and 12-month forecasts.

Full pattern length of stay restriction an Arrival-based restriction on a guest's stay. It may allow a guest to stay for 1, 2, 4, or 7 nights but not for 3,5, or 6 nights, for example.

Global distribution systems offering the inventory of multiple carriers and various suppliers of hospitality products and services. A computerized reservation system facilitating the sale of hospitality products and services primarily to organizational buyers, such as travel agents. The four major global distribution systems (GDS) today are SABRE, Amadeus, Galileo, and World span.

Group business that involves more than two individuals coming together for a common reason.

Induce trial to entice customers to try out new products or services.

Inelastic an economic term. Whenever a 1 percent change in price causes less than a 1 percent change in the quantity supplied or demanded, the elasticity calculation will result in a number less than 1. When this occurs, we say that the supply or demand is inelastic. In this case, the quantity supplied or demanded is not very sensitive to price.

Internet distribution system (IDS) the electronic system that facilitates purchases of hospitality products and services by consumers. It is comprised of a variety of components, each falling into one of the following eight categories:

Proprietary site (individual unit and/or CRS)

Merchant model

Retail operation

Opaque site

Auction site

Referral service

Special interest or niche site

General Web Portal.

Introductory stage the first phase in the life cycle of products and services. This is when the product or service is brand new and only the most adventurous consumers are poised to purchase.

Inventory products or services made available for sale through various channels of distribution.

Inventory management the process of controlling the units and availability of products and services across various channels of distribution.

Law of demand an economic law that states that the quantity of a good or service demanded by buyers tends to increase as the price of that good or service decreases, and tends to decrease as the price increases, all things being equal.

Law of supply an economic law that states that as price rises, the quantity supplied increases and as the price falls, the quantity supplied decreases.

Long-term goals and objectives usually defined as goals and objectives spanning more than one year.

Long-term strategies broad and far-reaching strategies planned for usually over one year.

Lost business business that had considered an organization's products or services, but in the end decided against purchasing.

Loyalty program programs whose members are rewarded either by receiving reduced rates or by increased value, such as added amenities. Some programs provide both reduced rates and added amenities.

Managing demand the act of controlling, directing, influencing, and creating consumer purchasing propensity for a specific point in time.

Market segmentation the practice of dividing a market into smaller specific segments sharing similar characteristics.

Market share that percentage share of an overall market captured by an individual Organization.

Market skimming a marketing strategy in which an organization sets prices high to create the perception of value and position the product or service higher in the minds of consumers. They would use this high price/value perception to capture, or skim, the top-paying customers from their competitors.

Maximum length of stay restriction a stay restriction that permits a guest to stay only a certain number of nights.

Minimum length of stay restriction a restriction that dictates how many nights a person checking in on the night that has this restriction must stay.

Must-stay restriction a restriction that applies to all reservations that stay over on the night on which this restriction is placed, including those guests arriving on that night. Guests must stay and pay through this date.

Net rate also referred to as the wholesale rate. A rate that is often 20 to 30 percent or more off the retail rate.

Off-season a season facing the lowest demand; also referred to as a weak or valley season.

Pace refers to a unit of time measurement.

Peak season a season with the highest demand.

Perfectly elastic an economic term. In the very rare case in which the supply or demand of a good would change without a change in price, the supply or demand of that good would be considered to be perfectly elastic.

Perfectly inelastic An economic term. In the other rare case in which the quantity supplied or demanded does not change at all in response to a change in price, the supply or demand of that good is considered to be perfectly inelastic. Numerically, this would be equal to zero (zero divided by the change in price).

Perishable a term meaning that if a product or service is not sold in a given time (a day, a night, a week) that product cannot later be sold. An example is an airline seat. Once the plane takes off, the seat cannot be stored for sale later.

Pick-up the number of rooms sold. Or the number of units that have been confirmed as sold within that block.

Prestige pricing a strategy of using high price to elevate the positioning of an organization's products and services and increase the perceived value to the consumer.

Price elasticity of demand calculated by taking the absolute value of the percentage change in the quantity of a good demanded and dividing that by the percentage change in the price of that good.

Price elasticity of supply calculated by taking the absolute value of the percentage change in quantity of a good supplied and dividing that by the percentage change in the price of that good.

Price leader an organization that leads the market in price.

Promotional pricing a pricing strategy established to increase capture of date-specific demand.

Property management system also known as a PMS. A computerized system used to manage the inventory of products and services available at a single location.

Rack rate full rate. In earlier days, many hotels had a key rack behind the front desk. Perched above the rack was a sign stating the night's room rate. Walk-in guests would be offered that rate upon check-in. Thus the term rack rate.

Rate integrity the maintenance of consistent prices for similar purchase conditions.

Regret a response that occurs when the facility has the product or service available, but the customer chooses not to buy based upon price or some other factor. Regrets often indicate an imbalance in the price/value relationship.

Reservation conversion percentage the percentage of reservations that progress from inquiry level to final sale.

Run of house the best available rates will be available for all room types. When a customer is given the run of the house, they are guaranteed the best available rate through the last room sold.

Short-term 3 to 5-day forecast a forecast that extends 3 to 5 days into the future.

Shortage a situation that occurs when the quantity demanded exceeds the quantity supplied. There are more buyers than there are goods or services at this price at this point in time.

Shoulder season a time of year immediately before or after a peak or weak season.

Stay controls duration rules and restrictions that may apply to arrival dates, departure dates, and minimum length of stay.

Stay pattern a pattern that can cover the individual's arrival day, number of nights' stay, and departure day for the guest.

Strategic revenue management process the eight fundamental elements plus the strategic IDEA combine to create the Rev MAP.

Strategy how the organization plans to achieve a goal or objective.

SWOT analysis an assessment of an organization's strengths, weaknesses, opportunities, and threats.

Tactics skillful methods used to achieve desired results. Tactics are the action steps taken to fulfill a strategy.

Transient an individual traveling, dining, attending a game or performance, or staying alone. A temporary individual hospitality customer.

Valley season a season facing the lowest demand; also known as a weak season.

Value-based pricing in this scenario the organization needs to focus upon the value placed by the customer on the product or service. Next, the organization needs to equate that value to a specific price. A price/value relationship then develops in which the price must be equal to or less than the value placed upon that product or service by a consumer to generate a sale.

Values the principles by which the organization operates. Values include being responsible corporate citizens and active protectors of the environment.

Wash factor a predetermined percentage of usage based upon historical data and experience.

Weak season a season facing the lowest demand; also referred to as a valley season.

Wholesale rate also referred to as the net rate. A rate that is often 20 to 30 percent or more off the retail rate.

Yield management the precursor to what we now refer to as revenue management. A90-day forecast a forecast extending 90 days into the future.