Hospitality Business Glossary

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• A

• Account Receivable Balance (AR)

  Accounts Receivable Balance represents the total amount owed by guests or business clients for services already delivered. It includes outstanding invoices that are expected to be collected.

• Accounts Payable (AP)

  Accounts Payable refers to the amounts a hotel owes to suppliers for goods and services already received. It represents short-term liabilities that must be settled within agreed payment terms.

• Accrual Accounting

  Accrual accounting records revenue when it is earned and expenses when they are incurred, regardless of when cash is received or paid. This method provides a more accurate view of financial performance over a given period.

• ADR Index (ARI)

  ADR Index (Average Daily Rate Index) measures a property’s ADR performance compared to a defined competitive set. An index above 100 indicates stronger pricing performance than competitors.

• API (Application Programming Interface)

  An Application Programming Interface (API) allows different software systems to communicate and exchange data automatically. APIs enable structured and secure data transfer between connected platforms.

• AR Aging Report

  An AR Aging Report categorizes outstanding receivables based on how long invoices have been unpaid, such as 0–30 or 31–60 days. It helps monitor collection performance and identify overdue balances.

• Audit Readiness

  Audit readiness refers to the ability to clearly explain and support financial results through accurate records, mappings, and documented processes. It ensures transparency and preparedness for internal or external audits.

• Audit Trail

  An audit trail is a documented history of financial transactions or system changes. It provides traceability and supports accountability, compliance, and internal controls.

• Authorization

  Authorization is the payment approval process that verifies whether sufficient funds are available before completing a transaction. It is commonly used for card pre-authorizations and deposit guarantees.

• Average Daily Rate (ADR)

  Average Daily Rate (ADR) measures the average room revenue earned per occupied room during a specific period. It is a core hospitality metric used to evaluate pricing performance.

• B

• Balance Sheet

  A balance sheet is a financial statement that reports a company’s assets, liabilities, and equity at a specific point in time. It provides a snapshot of financial position and capital structure.

• Batch Processing

  Batch processing handles data in scheduled groups rather than in real time. Transactions are collected and transferred at defined intervals instead of immediately as they occur.

• Booking Engine

  A booking engine is an online tool that allows guests to check availability and make direct reservations through a hotel’s website. It connects real-time inventory and pricing with the property’s reservation system.

• Budget vs Actual

  Budget vs Actual compares planned financial results with the actual performance achieved. It helps hospitality teams evaluate performance, control costs, and identify areas that require adjustment.

• C

• Cancellation Fee

  A cancellation fee is a charge applied when a booking is cancelled outside the permitted cancellation window. It compensates the property for lost revenue due to late cancellations.

• Cash Flow

  Cash flow represents the movement of money into and out of a business during a specific period. Positive cash flow ensures that a hospitality business can meet its financial obligations, pay suppliers, and invest in operations.

• Channel Manager

  A channel manager is a system that distributes room availability and rates across multiple booking channels simultaneously. It ensures inventory and pricing remain consistent across platforms.

• Chargeback

  A chargeback occurs when a guest disputes a card payment through their bank or card provider. The disputed amount is temporarily reversed while the transaction is investigated.

• Chart of Accounts

  A chart of accounts is a structured list of all financial accounts used in an accounting system. It defines how transactions are categorized for reporting and analysis.

• City Ledger

  In hotel accounting, the city ledger contains accounts for non-registered guests, companies, or entities with outstanding balances. It differs from the guest ledger, which includes charges for currently registered guests.

• City Tax

  City tax is a local tax charged per person or per night, depending on local regulations. It is typically collected by the property and remitted to the relevant authority.

• Class Reference

  A class reference is a tag used to categorize revenue or costs by segment, department, room type, or outlet. It supports more detailed reporting and performance analysis.

• Clearing Account / Suspense Account

  A clearing or suspense account is a temporary account used to hold transactions that are not yet fully matched or finalized. It is often used for payment processing before final reconciliation.

• Clearing Account Dynamics

  Clearing account dynamics describe how transactions, particularly payments, move from operational systems such as the PMS into the accounting platform. It defines how and when amounts are posted and reconciled.

• Closed Accounting Flow

  In a closed accounting flow, transactions are sent to the accounting system only after bills or invoices are finalized. This approach ensures that only completed financial records are exported.

• Commission

  A commission is a fee paid to a third party, such as an online travel agency, for generating a booking or sale. It is typically calculated as a percentage of the booking value.

• Consolidation

  Consolidation combines financial results from multiple properties or legal entities into a single set of financial statements. It provides a unified view of group performance.

• Consumed Accounting Flow

  In a consumed accounting flow, transactions are transferred to accounting as soon as they occur, even if the related bill remains open. This method reflects financial activity in near real time.

• Cost Allocation

  Cost allocation distributes shared expenses across departments, properties, or entities according to predefined rules. It ensures that costs are assigned accurately for reporting and analysis.

• Cost Center

  A cost center is a reporting unit used to track expenses for a specific department, property, or business segment. It allows organizations to analyze financial performance at a more detailed operational level.

• Cost of Goods Sold (COGS)

  Cost of Goods Sold (COGS) represents the direct costs associated with delivering goods or services to guests. It typically includes items such as food, beverages, amenities, or other consumables.

• CRS (Central Reservation System)

  A Central Reservation System (CRS) manages room availability, rates, and reservations across multiple channels and properties. It centralizes distribution and inventory control.

• CSV (Comma-Separated Values)

  CSV (Comma-Separated Values) is a common file format used to exchange structured data in rows and columns. It is widely used for importing and exporting financial and operational data between systems.

• D

• Data Enrichment

  Data enrichment adds additional context or attributes to raw data to increase its usefulness. Enriched data supports more accurate reporting, automation, and analysis.

• Data Mapping

  Data mapping is the process of matching fields between two systems to ensure information is transferred correctly. It defines how data from a source system corresponds to fields in a target system.

• Data Normalization

  Data normalization standardizes data formats and structures across systems to ensure consistent interpretation. It reduces inconsistencies caused by different naming conventions or data types.

• Data Residency

  Data residency refers to the physical or geographic location where data is stored and processed. It is often relevant for regulatory compliance and contractual requirements.

• Data Synchronization

  Data synchronization ensures that information remains consistent across connected systems, either in real time or at scheduled intervals. It prevents discrepancies between operational and financial records.

• Data Transformation

  Data transformation converts data from one format or structure into another before it is delivered to a target system. This may include reformatting, reclassifying, or enriching information.

• Data Validation

  Data validation verifies the accuracy, completeness, and structure of data before it is processed or transferred. It reduces errors and improves reliability across systems.

• Deferred Revenue

  Deferred revenue represents payments received before services are delivered. The revenue is recognized later, once the service has been provided.

• Deposit

  A deposit is an advance payment collected before a stay or service is delivered. It may later be applied to the final guest invoice or refunded according to policy.

• Deposit Ledger Balance

  Deposit ledger balance represents the total amount of advance payments recorded as a liability in the general ledger. These funds remain liabilities until the related services are delivered.

• Dispute

  A dispute is a formal challenge raised by a cardholder regarding a payment transaction. If unresolved, it may escalate into a chargeback.

• E

• EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)

  EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It measures operational profitability by excluding financing and accounting adjustments.

• EBITDA Margin

  EBITDA Margin expresses EBITDA as a percentage of total revenue. It indicates how efficiently a business converts revenue into operating profit.

• Endpoint

  An endpoint is a specific URL or address where an API sends or receives data. It defines the exact location for system-to-system communication.

• ERP (Enterprise Resource Planning)

  An Enterprise Resource Planning (ERP) system is a business platform that manages core functions such as finance, accounting, purchasing, and reporting. It centralizes data across departments within an organization.

• ETL (Extract, Transform, Load)

  ETL (Extract, Transform, Load) is a data workflow that extracts data from a source system, transforms it into the required format, and loads it into a target system. It is commonly used for integrations and reporting processes.

• Exception Handling

  Exception handling refers to the processes used to detect, manage, and resolve data mismatches or integration errors. It ensures that issues are identified and corrected systematically.

• F

• Financial Data Integrity

  Financial data integrity ensures that financial information remains accurate, complete, and consistent across systems. It supports reliable reporting and audit readiness.

• Folio

  A folio is a guest billing record that contains all charges and payments associated with a stay. It reflects the financial summary of a guest’s account at a property.

• Forecast

  A forecast is an estimate of future financial or operational performance based on current data and trends. In hospitality, forecasts support planning for revenue, staffing, and cash requirements.

• G

• Gateway Commission Costs

  Gateway commission costs are fees charged by payment providers when processing electronic transactions. These fees are typically deducted before funds are transferred to the merchant and must be recorded separately for accurate reconciliation.

• GDPR (General Data Protection Regulation)

  GDPR (General Data Protection Regulation) is a European regulation that governs how personal data is collected, processed, and protected. It sets strict requirements for privacy, security, and data transparency.

• General Ledger

  The General Ledger is the central accounting record that contains all financial transactions and account balances. It forms the foundation for financial statements such as the balance sheet and profit and loss statement.

• GOP (Gross Operating Profit)

  Gross Operating Profit (GOP) represents total revenue minus operating expenses, excluding fixed costs such as rent, interest, and taxes. It focuses on the profitability of day-to-day operations and controllable costs.

• GOP Margin

  GOP Margin expresses Gross Operating Profit as a percentage of total revenue. It indicates how efficiently a property converts revenue into operating profit.

• GOPPAR (Gross Operating Profit per Available Room)

  GOPPAR (Gross Operating Profit per Available Room) measures operating profit relative to available room inventory. It combines profitability and capacity to evaluate overall property performance.

• Gross Revenue

  Gross revenue refers to total revenue generated before deductions such as commissions, refunds, or certain taxes, depending on reporting standards. It reflects the full value of sales before adjustments.

• Guest Ledger Balance

  The guest ledger balance represents the total outstanding charges for guests currently staying at a property. It includes room revenue, additional services, and payments applied during the stay.

• H

• Hybrid Account Flow

  A hybrid accounting flow combines elements of closed and consumed accounting methods. Some transactions are exported after closure, while others are transferred as they occur.

• I

• Integration Health

  Integration health reflects the operational status of system connections, including error rates, delays, and data throughput. It provides visibility into the reliability of data exchange between platforms.

• Integration Latency

  Integration latency is the time delay between when data is created in one system and when it becomes available in another. Lower latency supports more timely reporting and operational visibility.

• Integration Monitoring

  Integration monitoring involves tracking the performance and reliability of system connections. It ensures that data transfers are functioning as expected and that issues are detected quickly.

• Intercompany

  Intercompany refers to transactions between entities within the same corporate group. These transactions must be properly recorded and balanced for accurate consolidated reporting.

• J

• Journal Entry

  A journal entry is a formal accounting record used to post transactions to the general ledger. Each entry includes debits and credits to maintain accounting balance.

• JSON (JavaScript Object Notation)

  JSON (JavaScript Object Notation) is a structured data format commonly used by APIs to exchange information between systems. It is lightweight, readable, and widely supported across platforms.

• K

• KPI (Key Performance Indicator)

  A KPI (Key Performance Indicator) is a measurable value used to track how effectively a business achieves specific objectives. In hospitality, KPIs such as ADR, RevPAR, occupancy, and labor cost percentage help teams monitor performance and support data-driven decision-making.

• L

• Labor Cost Percentage

  Labor Cost Percentage measures total labor expenses as a percentage of total revenue. It is used to evaluate staffing efficiency and overall cost control.

• Ledger Account Code

  A ledger account code identifies the specific general ledger account where a transaction is recorded. It ensures that financial data is categorized correctly for reporting.

• Ledger Accounting Logic

  Ledger accounting logic defines how transactions are structured and mapped from operational systems, such as a PMS, into the accounting platform. It determines how revenue, taxes, and payments are classified in the general ledger.

• M

• Middleware

  Middleware is software that acts as an intermediary between systems, enabling communication and data exchange. It facilitates integration without requiring direct system-to-system connections.

• Multi-entity Accounting

  Multi-entity accounting manages financial records across multiple legal entities within the same organization. It often requires separate ledgers and consolidated reporting at group level.

• Multi-property

  A multi-property structure refers to an organization managing multiple hotels under a shared operational or financial framework. It allows centralized oversight while maintaining property-level reporting.

• N

• Net Revenue

  Net revenue represents total revenue after deducting direct costs such as commissions, refunds, or applicable taxes, depending on reporting standards. It reflects the actual income retained by the business.

• Night Audit

  The night audit is a daily process that closes and reconciles hotel transactions for a specific business date. It verifies revenue, payments, and system balances before rolling to the next day.

• No-show Fee

  A no-show fee is a charge applied when a guest fails to arrive without cancelling within the permitted timeframe. It compensates the property for lost inventory.

• O

• OAuth

  OAuth is a secure authorization protocol that allows systems to grant access without sharing passwords. It enables controlled and secure integration between platforms.

• Occupancy Index (MPI)

  Occupancy Index, also known as Market Penetration Index (MPI), compares a property’s occupancy rate to that of a defined competitive set. An index above 100 indicates stronger occupancy performance than competitors.

• Occupancy Rate

  Occupancy Rate measures the percentage of available rooms sold during a specific period. It is a core indicator of demand and capacity utilization.

• OTA (Online Travel Agency)

  An Online Travel Agency (OTA) is a third-party platform that sells hotel rooms through digital channels. OTAs typically charge a commission for each booking generated.

• OTA Commission

  OTA commission is the fee paid to an online travel agency for bookings made through its platform. It is usually calculated as a percentage of room revenue.

• P

• P&L (Profit and Loss Statement)

  A Profit and Loss Statement (P&L) is a financial report that summarizes revenues, costs, and expenses over a specific period. It provides a clear view of operational performance and profitability across departments or properties.

• Package

  A package is a bundled offering that combines room nights with additional services such as breakfast, parking, or spa access. Package revenue may require allocation across different revenue categories.

• Payload

  A payload is the data content transmitted during an API or integration call. It contains the actual information being exchanged between systems.

• Payment Gateway

  A payment gateway is technology that securely processes electronic transactions, such as credit or debit card payments. It connects merchants to financial institutions for authorization and settlement.

• Payment Method Code

  A payment method code identifies the type of payment used in a transaction, such as cash, credit card, voucher, or OTA billing. It supports accurate financial classification and reconciliation.

• PMS (Property Management System)

  A Property Management System (PMS) is the core operational system used to manage reservations, check-in and check-out, room inventory, and guest billing. It serves as the primary source of operational data within a hotel.

• POS (Point of Sale)

  A Point of Sale (POS) system records on-site transactions such as restaurant, bar, spa, or retail sales. It captures revenue and payment data at the moment of purchase.

• Posting

  Posting is the process of recording financial transactions into a ledger or accounting system. It ensures that revenue, expenses, and payments are reflected in financial records.

• Profit Centers

  A profit center is a reporting unit responsible for generating both revenue and expenses. It allows organizations to evaluate the profitability of specific departments, outlets, or properties independently.

• R

• RBAC (Role-Based Access Control)

  RBAC (Role-Based Access Control) is a permission model where system access is granted based on a user’s role and responsibilities. It ensures that users can only access the data and functions relevant to their position.

• Real-time Processing

  Real-time processing handles and transmits data immediately as events occur. It enables up-to-date reporting and operational visibility.

• Receivable Tracking

  Receivable tracking manages how unpaid invoices are monitored and followed up within the PMS or accounting system. It supports structured collections and visibility into outstanding balances.

• Reconciliation

  Reconciliation is the process of verifying that financial records between systems or accounts match. It ensures accuracy and consistency in financial reporting.

• Refund

  A refund is the return of funds to a guest after a completed payment. It may be issued due to cancellations, billing corrections, or service adjustments.

• Resort Fee

  A resort fee is a mandatory charge added to a guest’s stay for access to amenities such as Wi-Fi, fitness facilities, or pools. It is typically billed per room per night and posted separately from base room revenue for accurate reporting and tax treatment.

• Revenue Allocation

  Revenue allocation distributes bundled or package revenue into the appropriate categories, such as rooms, food and beverage, or other services. It ensures accurate financial reporting across departments.

• Revenue Recognition

  Revenue recognition defines the accounting principles that determine when revenue is recorded. Revenue is typically recognized when services are delivered rather than when payment is received.

• RevPAR (Revenue per Available Room)

  RevPAR (Revenue Per Available Room) measures total room revenue divided by the number of available rooms during a specific period. It can also be calculated by multiplying ADR by occupancy rate.

• RevPAR Index (RGI)

  RevPAR Index, also known as Revenue Generation Index (RGI), compares a property’s RevPAR to that of a defined competitive set. An index above 100 indicates stronger performance than competitors.

• Routing Rules

  Routing rules determine how charges are assigned or transferred, such as to a company account, master folio, or split folio. They define how revenue and payments are distributed within the billing structure.

• S

• Schema

  A schema defines the structure and organization of data fields within a system or dataset. It specifies how information is formatted and interpreted during integration.

• Service Charge

  A service charge is an additional fee applied to a bill for service-related costs. Its treatment may differ from tips or taxes depending on local regulations.

• Settlement

  Settlement is the process of finalizing a payment and transferring funds from the guest’s bank to the merchant account. It occurs after authorization and confirms the movement of funds.

• SFTP (Secure File Transfer Protocol)

  SFTP (Secure File Transfer Protocol) is a secure method for transferring files between systems. It encrypts data during transmission to protect sensitive information.

• SLA (Service Level Agreement)

  An SLA (Service Level Agreement) defines agreed service standards such as uptime, response time, or resolution targets. It sets measurable expectations between service providers and clients.

• SSO (Single Sign-On)

  SSO (Single Sign-On) is an authentication method that allows users to access multiple systems with one set of login credentials. It simplifies access management while maintaining security.

• Subscription / Recurring Revenue

  Subscription or recurring revenue refers to income that repeats at regular intervals, such as monthly or annual software fees. It provides predictable revenue streams and supports long-term financial planning.

• Suspense Account Receivables

  A suspense account receivables setup temporarily records debtor-related transactions before they are fully matched or finalized. The account should clear to zero regularly and serves as a control mechanism to detect discrepancies in receivable postings.

• T

• Tax

  Tax is a mandatory charge collected on behalf of government authorities, such as VAT or city tax. Properties are responsible for correctly calculating, collecting, and reporting these amounts.

• Tip / Gratuity

  A tip or gratuity is an additional amount paid for service, either voluntarily by the guest or automatically applied. Its accounting treatment may vary depending on local regulations.

• Tracking Categories

  Tracking categories are reporting dimensions used to classify transactions by department, property, or business segment. They provide more granular visibility into financial performance.

• TRevPAR (Total Revenue per Available Room)

  TRevPAR measures total revenue from all sources, including rooms, food and beverage, and other services, divided by available rooms. It provides a broader view of overall property performance than room revenue metrics alone.

• Trial Balance

  A trial balance is a summary of all general ledger account balances at a specific point in time. It is used to verify that total debits equal total credits before preparing financial statements.

• U

• Uptime

  Uptime represents the percentage of time a system is operational and available as expected. It is a key indicator of system reliability and service stability.

• USALI (Uniform System of Accounts for the Lodging Industry)

  USALI is a standardized accounting framework specifically designed for the hotel industry. It defines how revenues, expenses, and key performance indicators should be categorized to ensure consistent reporting across properties.

• V

• Variance

  Variance is the difference between planned (budgeted or forecasted) results and actual performance. Analyzing variances helps teams understand performance gaps and make informed operational or financial adjustments.

• VAT (Value Added Tax)

  VAT (Value Added Tax) is a consumption tax applied to goods and services in many countries. It is collected by businesses and remitted to tax authorities.

• W

• Webhook

  A webhook is an automated message sent from one system to another when a specific event occurs. It enables real-time communication between connected platforms.

• Webhook Event

  A webhook event is the specific action that triggers a webhook, such as a closed folio or completed payment. It defines when data is automatically transmitted to another system.

• Working Capital

  Working capital is the difference between a company’s current assets and current liabilities. It indicates short-term financial health and the ability to manage day-to-day operational expenses.