{"id":51443,"date":"2019-09-11T00:57:23","date_gmt":"2019-09-10T14:57:23","guid":{"rendered":"https:\/\/nuvho.com\/5-revenue-management-terms-acronyms-explained\/"},"modified":"2019-09-11T00:57:23","modified_gmt":"2019-09-10T14:57:23","slug":"5-revenue-management-terms-acronyms-explained","status":"publish","type":"post","link":"https:\/\/nuvho.com\/en-AU\/5-revenue-management-terms-acronyms-explained\/","title":{"rendered":"5 Revenue Management Terms &amp; Acronyms Explained"},"content":{"rendered":"\n<p>Here are five revenue management terms and acronyms that every hotel revenue analyst should know, including Rate Parity, RevPAR, GOPPAR, EBITDA and Total Revenue Management. <\/p>\n\n\n\n<!--more-->\n\n\n\n<div class=\"wp-block-image\"><figure class=\"alignleft\"><img loading=\"lazy\" decoding=\"async\" width=\"300\" height=\"250\" src=\"https:\/\/nuvho.com\/wp-content\/uploads\/2019\/08\/PARITY.png\" alt=\"Hotel Rate Parity\" class=\"wp-image-6858\"><\/figure><\/div>\n\n\n\n<h2 class=\"wp-block-heading\">1. What is Rate Parity?<\/h2>\n\n\n\n<p>Rate\nParity is the practice of offering the same rate and terms for a specific room\ntype through every distribution channel for a hotel. <\/p>\n\n\n\n<p>Rate\nParity clauses are part of an agreement between a hotel and an OTA (Online\nTravel Agency) which restricts the hotel from advertising cheaper prices on\ntheir own websites.<\/p>\n\n\n\n<p>There\nare two types of Rate Parity; Wide Rate Parity and Narrow Rate Parity.<\/p>\n\n\n\n<div style=\"height:40px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">What\nis Wide Rate Parity?<\/h3>\n\n\n\n<p>Wide\nRate Parity is the agreement between a hotel and the OTA\u2019s where the hotel\nagrees not to undercut the room prices across all distribution channels\nincluding the hotel\u2019s own website and on other OTAs.<\/p>\n\n\n\n<div style=\"height:20px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">What\nis Narrow Rate Parity?<\/h3>\n\n\n\n<p>Narrow\nRate Parity clauses allow hotels to offer lower rates through other OTA\u2019s or\nthrough indirect or offline channels such as loyalty programs, via email and\nphone. However, under this clause hotels can still not not advertise a lower\nrate on their own website. <\/p>\n\n\n\n<p>Rate\nParity has been the subject of much debate. &nbsp;In 2013 Germany was the first country to\nintroduce regulations covering hotel rate parity. Since then several other\nEuropean countries have restricted or prohibited either one or both of the OTA\nrate parity clauses.  <\/p>\n\n\n\n<p>Earlier\nthis year Booking.com and Expedia announced they would only implement Narrow\nRate Parity clauses in Australia, New Zealand and the EU. While in other major\nmarkets they continue to adopt Wide Rate Parity clauses. <\/p>\n\n\n\n<div style=\"height:20px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\">2. What is RevPAR?<\/h2>\n\n\n\n<p>RevPAR is\nthe acronym for Revenue Per Available Room <\/p>\n\n\n\n<p>RevPAR is\none of the key financial metrics in hotel revenue management to see how the\nhotel performs in terms of revenue generated by the rooms. It does not take\ninto account any other revenue generating activities and income streams of the\nhotel. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">How do you calculate RevPAR?<\/h3>\n\n\n\n<p class=\"has-normal-font-size\">Rooms\nRevenue \/ All Available Rooms = RevPAR<\/p>\n\n\n\n<div style=\"height:20px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\">3. What is GOPPAR?<\/h2>\n\n\n\n<p>GOPPAR&nbsp;is\nthe acronym for Gross Operating Profit&nbsp;Per Available Room<\/p>\n\n\n\n<p>GOPPAR\ntakes into account the number of rooms available to sell in a hotel, rather\nthan the number of rooms sold. And because GOPPAR looks at the Gross Operating\nProfit, rather than just the revenue from selling hotel rooms it is a good indicator\nas to how the hotel is doing overall. GOPPAR is a particularly useful measure\nfor investors and hotel owners because it gives them a total picture of the\nvalue of their hotel asset.  <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">How do you calculate GOPPAR?<\/h3>\n\n\n\n<p class=\"has-normal-font-size\">Gross Operating Profit^ \/ Available Rooms = GOPPAR&nbsp; <\/p>\n\n\n\n<p> ^Gross Operating Profit = Gross Revenue &#8211; Gross expenditure <\/p>\n\n\n\n<div style=\"height:20px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\">4. What is EBITDA? <\/h2>\n\n\n\n<p>EBITDA is\nthe acronym for Earnings Before Interest, Taxes, Depreciation and Amortization.<\/p>\n\n\n\n<p>The\nEBITDA as a measure is used to determine, analyse and compare the profitability\nof a hotel. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">How do\nyou calculate EBITDA?<\/h3>\n\n\n\n<p class=\"has-normal-font-size\">Revenue \u2013\nExpenses^ = Ebitda<\/p>\n\n\n\n<p>^Expenses\n= the hotel\u2019s total earnings before interest, tax, amortization and\ndepreciation<\/p>\n\n\n\n<div style=\"height:20px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\">5. What is Total Revenue Management?<\/h2>\n\n\n\n<p>Total Revenue Management is the active management of all revenue sources in a hotel. This includes rooms, F&amp;B, Spa, Gym, WiFi, Conferencing, Tours\/Activities and every other income stream the hotel generates. <\/p>\n\n\n\n<p>A Total Revenue\nManagement strategy implies that management of the revenue is applied to every\nhotel department, with the objective to optimise profits for each department by\nmaximising the revenue and controlling costs. It is said that Total Revenue Management\nis the future of Hotel Revenue Management <\/p>\n\n\n\n<div style=\"height:20px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<p>ABOUT NUVHO<\/p>\n\n\n\n<p><a href=\"https:\/\/nuvho.com\/\">Nuvho<\/a> is a Hotel Services &amp; Management Company focused on revenue generation for hoteliers. We offer outsourcing, training and support in the areas of Sales, Marketing, Revenue, Yield &amp; Distribution Management. <\/p>\n\n\n\n<p>We also offer\none of the best and most cost-effective booking engines on the market. It\nfeatures an in-built OTA price comparison tool and has a proven high conversion\nrate, achieving between 5% to 7% for our hotel clients. The system integrates\nwith most PMS and channel management systems.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Here are five revenue management terms and acronyms that every hotel revenue analyst should know, including Rate Parity, RevPAR, GOPPAR, EBITDA and Total Revenue Management.<\/p>\n","protected":false},"author":9,"featured_media":51446,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"off","_et_pb_old_content":"","_et_gb_content_width":"","content-type":"","footnotes":""},"categories":[166],"tags":[260,261,258,167,259,262],"class_list":["post-51443","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-revenue-distribution","tag-ebitda","tag-goppar","tag-rate-parity","tag-revenue-management","tag-revpar","tag-total-revenue-management"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>5 Revenue Management Terms &amp; 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