Like any, our industry is littered with acronyms, specialised terms and phrases.
Although we try to speak in plain English, we do occasionally need to use "industry terms". This glossary attempts to shed light on some of the more common terms used. If you are at all confused by any of our language, please do let us know, as we are always looking to ensure or message is crystal clear.
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Average Daily Rate: The average price per room sold in a hotel. Total rooms revenue divided by total rooms sold.
ADR is related to ARI, the indexed form of ADR.
The process of writing off an asset investment over the projected life of the asset or the pay-down of mortgage or loan interest.
Accounts Receivables: The process by which receivables from customers are reviewed and tracked on a monthly basis.
Average Rate Index: Calculated by dividing the hotel's average room rate by the average of the competitor set market rate as reflected on the STR (Smith Travel Research) Report.
Best Available Rate or Best Flex Rate: the starting rate at which all others are measured.
Business Travel Agency: Travel agency/consortia, now commonly known in the industry as OTA (Online Travel Agencies). Examples included expedia.com and hotels.com
Central Reservation Office: These offices serve as "hubs" for making reservations for our guests.
Contribution to Profit: GOP (Gross Operating Profit) minus rent, interest, depreciation, insurance (asset costs) and taxes.
Earnings Before Interest, Taxes, Depreciation, Amortization: An industry measure of operating profitability. On an IHG P&L is obtained by adding Net Operating Profit and Depreciation and Amortization.
Extended Stay Hotel
A hotel designed for guests staying for periods of time longer than a few nights and tending to have a higher proportion of suites than normal hotels, e.g. Staybridge Suites and Candlewood Suites.
Furniture, Fixtures and Equipment: Items such as the furniture, lamps, beds, chairs, etc. in a guest room or meeting room.
An operator who uses a brand under licence from the brand owner (e.g. InterContinental Hotels Group).
Brand owner (e.g. InterContinental Hotels Group) who licenses brands for use by other operators.
A hotel owned by an individual or company, who has an agreement with IHG to operate that hotel using an brand name and adhering to its standards.
Full Time Equivalent: The method by which labor standards are reviewed for managed hotels. Factors in regular and overtime hours for all employees of hotel divided by the number of working hours. Reflected in detail within budget and labor models.
Global Distribution System: A network of electronic distribution systems that travel agents rely on to gather information for effective trip planning. Otherwise known as Airline Reservation Systems. GDS include SABRE, Abacus, WORLDSPAN, Apollo, Galileo and AMADEUS.
General Ledger: The accounting document which itemizes and classifies the debits and credits which make up the expense numbers on the profit and loss statement.
General Manager of the hotel location.
Guest Services Manager: Also known as Front Office Manager in some hotels
Gross Operating Profit: Total revenue minus all operating expenses. Before debt service etc.
IHG's Worldwide reservations system.
Charges to hotels under management and franchise agreements for the use of Holidex, IHG's proprietary reservation system.
Hotel Performance Support: Staff of IHG that provide ongoing assistance to hotels on revenue, sales, quality etc, issues.
Key Account Directors: Staff of IHG Global Sales who work directly with hotels and key accounts.
Key Negotiated Rate: Account that is a Key Account for IHG and is handled by Global Sales.
Lowest Internet Rate Guarantee: The guarantee we make to our customers that they will not find a lower published (non-Opaque) rate than that presented for a particular IHG property. Designed to steer business to our brand properties vs. the competition and penalizes hotels that have violations. Doesn't apply to Opaque sites where guest does not see the hotel until confirmation of booking.
Locally Negotiated Rates: Reflected on the P&L as Corporate Negotiated Rates and reflecting those accounts contracted directly by hotel sales with a local account.
Last Room Availability: Last Room Availability allows the guest to book a room at a rate as long as Rate Category Best Flex is available to sell. Usually associated with preferred accounts and is negotiated into the contract.
A contract to operate a hotel on behalf of the hotel owner.
Market Area Central Reservation Office: Reservation agents based in one of our Central Reservation offices that are custom trained to handle calls for selected hotels in specific cities or regions.
Market Penetration Index. The occupancy of the subject hotel divided into the comp set occupancy as reflected on the STR (Smith Travel Research) Report.
New Hotels Opening Process: An IHG function to manage and assist owners to open hotels and start trading.
Rooms occupied by hotel guests, expressed as a percentage of rooms that are available.
Operating Supplies and Equipment
Online Travel Agencies: Travel agency/consortia, now commonly known in the industry as OTA. Examples included expedia.com and hotels.com.
Per Available Room: A method of calculating costs or revenue or other item by dividing by the total number of rooms available over a period of time.
An automated revenue management system dedicated specifically to forecasting and designed to determine the most competitive rate for a hotel's guests while maximizing room revenue.
Signed/executed agreements, including franchises and management contracts, for hotels which will enter the InterContinental Hotels Group system at a future date.
Property Management System: System used by the hotels whose functionality includes Check-in/out, Reservations, Guest History, Accounts Receivable, Reporting, Postings and Housekeeping. Hotel PMS need to interface with various IHG systems including HOLIDEX.
Profit and Loss: The accounting document which summarizes a business' financial performance for a certain period of time. It lists revenues, expenses and profits.
Per Occupied Room: A method of calculating costs by dividing the amount of the expense by the total number of rooms occupied over a period of time.
Point of Sale: Term used to identify equipment used in the transaction of daily business (i.e., retail shops, restaurants etc). POS marketing material is advertisments, flyers and display items used at the point where customers complete their transaction.
Quality Evaluation: The process by which an inspector from IHG reviews a hotel and ranks its performance against quality standards of the company.
RevPar / RPAR
Revenue Per Available Room: A way of stating a hotel's room revenue based upon number of total rooms within the hotel. Room revenue divided by the number of room nights that are available (can be mathematically derived from occupancy rate multiplied by average room rate).
RevPar is related to RGI, its indexed form.
Request For Proposal
Revenue Generation Index: The hotel RevPar index or market place yield. Calculated by taking the hotel's RevPar divided into the RevPar of its competitive set. Also, reflected in Star Report.
Remainder of Year forecast: This document details year to date performance as well as projection by month through year's end. A part of the forecasting model available to hotels.
Revenue generated from the sale of room nights.
The percentage of room revenue that a franchisee pays to the brand owner for use of the brand name.
Standard Operating Procedures: Documentation on the standard way that tasks or processes should be carried out.
Smith Travel Research: The company who produces the weekly and monthly STR reports.
Number of hotels (or rooms) owned, managed or franchised by InterContinental Hotels Group.
Travel Agency Commission Program: The automated method of IHG in which most travel agencies are processed and paid.
Third Party Intermediary: Third party internet providers.
The percentage of employees who have left their jobs within a hotel or within the Corporate office.
Virtual Central Reservations Office