Table of Contents
Transient Rooms Revenue Group Rooms RevenueContract Rooms RevenueOther Rooms RevenueThe primary source of revenue for a lodging property generally arises from the rental of rooms and suites to guests. Room Revenue is divided into four parts:
- Transient Rooms Revenue
- Group Rooms Revenue
- Contract Rooms Revenue
- Other Rooms Revenue
Transient Rooms Revenue
Transient Room Revenue commonly includes revenue derived from rental of rooms and suites by individuals or groups occupying fewer than 10 rooms per night. It also includes rooms leased to guests who have established permanent residence, with or without a contract. Transient stays typically include the following categories:
Retail
A market positioned, seasonally priced room rate for transient business. It is a non-discounted, non-qualified rate that is always available when the hotel has rooms to sell.
Discount
A rate open to the general public (non-qualified) under which the guest pays less than the Retail rate. Examples include advance purchase, loyalty redemptions or offers, packages, promotions, and online travel agency (OTA) opaque.
Negotiated
A rate negotiated with special (typically corporate) accounts. Identification with a particular company or organization is required to obtain this rate.
Qualified
A rate that requires the customer to be associated with a particular organization or to have a specific affiliation in order to book. Identification is required upon check-in. Examples include senior citizen, AAA, government, and employee rate.
Wholesale
A discounted room rate packaged with outside travel and/or car rental prior to being sold to the guest. The rate is not visible to the guest.
Group Rooms Revenue
Group Revenue includes revenue derived from renting blocks of rooms or suites to a group. A group is typically defined as 10 or more rooms per night sold pursuant to a contract. Group Rooms Revenue is recorded net of discounts to wholesalers for selling large blocks of rooms. Rebates or subsidies granted directly to a group should be recorded as contra revenue. To facilitate effective sales and marketing efforts, Group Rooms Revenue is generally segregated by market segment. Market segments typically include the following categories:
Corporate
A negotiated rate for a block of rooms associated with a company related to industries such as, but not limited to, manufacturing, retail, healthcare, insurance, financial, law firms, professional sports organizations, entertainment companies, and transportation corporations.
Assoc. / Conv
Association / Convention
A negotiated rate for a block of rooms associated with a trade, professional, or philanthropic association.
Govt
Government
A negotiated rate for a block of rooms associated with qualifying government agencies including, but not limited to, active military, national security, and health and human services.
Tour/Wholesale
A negotiated rate for a block of rooms associated with tour operators/wholesalers who package together travel components and sell them as escorted tour groups, escorted tour series, or inbound ad hoc groups.
SMERF
A negotiated rate for a block of rooms associated with organizations that fall into the categories of social, military, education, religious, and fraternal.
| SMERF | Detail |
|---|---|
| Social | A celebratory or personal event |
| Military | Veterans, support, and social groups |
| Education | Private or public organizations founded and united for the specific purpose to educate |
| Religious | Faith-specific organizations |
| Fraternal | Honor societies, fraternities, sororities, unions, and unique forms of organizations that limit membership to specific fields of study, expertise, or employment |
Contract Rooms Revenue
Contract Rooms Revenue includes revenue derived from a contract with another entity for a consistent block of rooms for an extended period over 30 days. Contract Rooms Revenue is recorded net of discounts. Examples include domiciled airline crews, ongoing corporate training seminars, and incentive-based benefit programs.
Other Rooms Revenue
Other Rooms Revenue is miscellaneous revenue associated with guestrooms. This revenue is included in determining Total Rooms Revenue and is used in the calculation of average daily rate (ADR). Items associated with Other Rooms Revenue include:
No-Shows
This is revenue derived from a transient or group guest who has individually guaranteed payment to reserve a room, but has failed to occupy the room. No room nights are to be recorded for a no-show.
Room Nights
No room nights (occupancy) are to be recorded for a no-show.
Cutoff Date
Group attrition and cancellation and transient guest cancellation after the cutoff date are included in Attrition Fees and Cancellation Fees on Miscellaneous Income—Schedule 4, not Other Rooms Revenue.
Day Use
This is revenue derived from sources such as rooms used for hospitality suites, dressing rooms, employment interviews, movie auditions, and wholesale distributors (for example, clothing, toys, other merchandise).
No Food and Beverage services should be included.
Early
Early Departure Fees
Late
Late Check-out Fees
Rollaway / Crib
Rental of rollaway beds & cribs
Service
Surcharges and service charges.
These charges generally include any mandatory, non-discretionary, or other charge automatically added to a customer account in respect of the service or use of an amenity. Service charges in the Rooms department are common in certain geographic areas.
Resort fees are not part of Rooms service charges and should be included in Miscellaneous Income—Schedule 4.
Note
Items placed in the guestroom for sale to guests are not included in the calculation of Other Rooms Revenue. For example, bottled water or packaged food items that are charged to guests if consumed are considered Mini Bar Food Revenue on Food and Beverage—Schedule 2. Non–food and beverage items sold in the room are credited to Miscellaneous Other Revenue on Food and Beverage—Schedule 2. Properties without food and beverage operations would show commission income on Miscellaneous Income—Schedule 4. However, if the property earns revenue and incurs expenses, the gross amounts should be reported in Other Operated Departments.