Property Management Glossary
The definitive guide to short-term rental terminology. Master the language of hospitality.
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6 definitions foundBreak-even Occupancy
Break-even Occupancy is the minimum percentage of nights a short-term rental must be booked each month to cover all fixed and variable costs without generating a profit or a loss. It is the floor below which a host is losing money regardless of how well they manage the guest experience.
Net Operating Income Short-Term Rentals
Net operating income (NOI) for short-term rentals is gross rental income minus all operating expenses, revealing a property's true cash-generating ability independent of financing decisions. A property earning $48,000 annually with $18,000 in operating costs produces an NOI of $30,000.
Occupancy Rate
The occupancy rate measures how much of a property or space is currently in use compared to its full capacity. It is an essential metric for understanding space utilization, financial planning, and maximizing revenue.
RevPAR
RevPAR, or Revenue Per Available Room, is a key hospitality metric that measures a property's ability to fill its available rooms at an average rate. It combines both occupancy rate and average daily rate (ADR) into a single performance indicator.
RevPAR vs ADR
RevPAR (Revenue Per Available Room) measures overall revenue efficiency by combining occupancy and average rate, while ADR (Average Daily Rate) measures the average revenue earned per occupied room, focusing solely on pricing strategy effectiveness.
Turnover Cost
Turnover cost is the total expense incurred between a guest checking out and the next guest checking in, encompassing cleaning labor, consumable restocking, linen depreciation, inspection time, and maintenance triggered at checkout. It is consistently higher than the cleaning fee alone, often by 35% to 60%, and directly affects pricing accuracy and profit margins for short-term rental operators.