Vacation Rental Glossary: A-Z of Industry Terms

Find definitions of the top industry terminology with our comprehensive vacation rental glossary.

A

Accessible vacation rental: a property which has been adapted or modified to be suitable for disabled travelers and wheelchair users.

Advance payment: a portion of the total rental amount which the guest pays in advance of their stay.

Advertised price: the price per night that a rental manager or channel is showing to the traveler.

Alternative accommodation: the term commonly used to refer to any non-hotel accommodation offerings.

Amenities: the desirable or useful features of a property. For example, air-conditioning, WiFi or a barbecue.

Amenity fee: an extra amount guests pay an owner or property complex in order to access certain amenities, such as tennis courts, golf, beach chairs, etc.

American Society of Home Inspectors (ASHI): not-for-profit professional association for home inspectors to set and promote standards for property inspections. ASHI is the most respected professional association for home inspectors in North America.

API: is the acronym for Application Programming Interface, a software intermediary that allows two applications to “talk” to each other.

API integration: a full connection between two software platforms that allow data sharing. For example, channel managers usually offer API connections to the top booking portals such as Airbnb, Booking.com, Expedia, HomeAway etc.

Availability calendar: an online calendar which shows up-to-date calendar availability for a property.

Availability, rates & inventory: a system for transferring property availability between systems.

Available nights: the total number of nights that a property is open for bookings throughout the year. Often, the owner will want to spend a few days per year at the property themselves!

Average Daily Rate (ADR): the average daily rate is a metric widely used in the hospitality industry to indicate the average rental income per paid occupied room in a given time period. The average daily rate is calculated by taking the average revenue earned from rooms and dividing it by the number of rooms sold.

Average room rate: alternative term for average daily rate (ADR).

Average Length of Stay (ALOS): the average number of nights that a guest stays at a property over a certain time period (for example, a month, a season, or a year).

Average Rate Index (ARI): a measurement of success that shows the rental property’s average daily rate over a certain time period compared to competitors. ARI can help determine whether to raise, lower or hold room rates.


B

Back-to-back booking: when one set of guests check out and another set check in on the same day.

Bank transfer: payment method whereby one party (i.e. the guest) sends money to the other (the host) directly via their bank account.

Bartered services: the act of exchanging a stay at a vacation property for goods or services, such as repairs and maintenance.

Best Available Rate (BAR): best available rate is the lowest, non-restricted rate bookable by all guests. This rate can change several times per day or per week.

Best rate guarantee: the promise that whatever rate the traveler books at is the lowest possible rate that can be found anywhere.

Billboard effect: the theory that by listing a vacation rental on multiple portals or OTAs, the property will receive more exposure and as a result, more direct bookings. Also known as window shopping.

#BookDirect: a movement within the vacation rental industry to educate guests about the many advantages of booking directly with the owner or property manager, instead of on third-party sites, in order to save money, find the best price and have direct communication with owners.

Booking confirmation: email which includes booking reference, rental contract and house rules. Usually sent to guests at the time that they book your vacation rental.

Booking curve: a tool that visually shows how bookings materialize over a certain time period, helping property owners and managers to adjust rates and availability accordingly.

Booking engine: an application or software used on accommodation websites to securely process reservations and payments.

Booking fee: a fee that some agencies or websites charge guests for booking through them.

Booking pace: the speed at which bookings materialize over a period of time from the booking date to the arrival date. Monitoring booking pace can help identify when patterns form, making it is easier to predict a swell of interest and maximize revenue.

Booking policy: defines the terms and conditions of payment schedules, cancellations and damage deposits.

Booking request: the reservation method which requires approval from the host before a guest can book a property. In general, guests will message hosts in order to ask for availability and confirm the booking before sending any payment.

Booking widget: a software plugin for hospitality industry websites which allows them to take online bookings with payments.

Breakage deposit: see Damage deposit.

Break-even point: to break even on an investment property is when monthly rental income is enough to pay all the operating expenses and bills associated with ownership of the property.

Broom clean: a term used in the real estate industry to describe the condition or cleanliness of a home. It is open to interpretation, however, broom-clean homes are usually free of excess things like personal items and debris, and have been swept or vacuumed.

Business plan: an overarching set of rules, goals and frameworks that will help you to make decisions for your business and its future.

Buyer’s agreement: a signed and sealed document between you and a selling agent that notes that the agent cannot show anyone else a specific property until you confirm that you are no longer interested in purchasing it.

C

Call-to-Action (CTA): a prompt on a website that tells the user to take some specified action. Usually takes the form of a button or hyperlink and written as a command such as “Book Now” or “Check Availability”.

Cancellation fee: typically a sum of money the guest must pay if they cancel a reservation after the cancellation deadline has passed.

Cancellation policy: the set of rules which dictate what happens if a guest cancels their reservation within a certain notice period.

Canned responses: predetermined responses to common questions, for example, “when is check-in time?”.

Changeover days: specific days of the week which owners set as the days they would like bookings to begin and end.

Channels: listing websites where owners can distribute their properties and manage them via a channel management software.

Channel fee: a commission that a third-party distributor charges a property owner for listing their vacation rental on their website.

Channel manager: a tool which offers synchronization between third-party distribution sites and a central platform for managing reservations. Channel managers typically synchronize calendar availabilities, though some connections will offer synchronizations of property data, rates, messages and more.

Check-in: the procedure by which the property formally registers the arrival of the guest for their stay.

Check-out: the procedure by which the guest formally vacates the property after their stay.

Cleaning fee: a one-time fee hosts charge guests to cover the cost of cleaning their property after guest departure.

Closed to arrival (CTA): a tool that makes certain days unavailable for arrivals.

Co-host: feature on Airbnb which allows an owner to assign a co-host to the account. The co-host is somebody that the listing owner knows already and they will help them to take care of their home and guests.

Comparative market analysis (CMA): a report on comparable homes in the area that is used to derive an accurate value for the home in question.

Competitive set: a group of rental properties that can be seen as direct competitors to your property because they are similar in style and price, and attract the same demographic. Owners often compare performance against their compset, in order to find ways to make their own offering more competitive.

Complex: a building (or group of buildings) with multiple units for rent, usually managed by a homeowners’ association (HOA) or vacation rental manager.

Compromise: choosing a property that meets most of your vacation rental goals, but may not be exactly what you wanted.

Condo hotel: a building with condos but which offers services like a hotel (concierge, room service, etc.).

Connectivity: synchronization between a variety of platforms allowing owners to maximize the discovery of their properties by guests. Exportation of rates, listing content and calendar availability to the top OTAs to provide a reliable means of listing on different sites.

Conversion rate: the number of travelers viewing a property online or making an inquiry who decide to actually book it.

Cosmetic upgrades: home improvements which impact, above all, the property’s look at feel. For example, painting, installing new flooring or a new fireplace.

Custom fees: any additional fee that is unique to a property. For example, most properties will have a cleaning fee, but only those with hot tubs can charge a “hot tub cleaning fee”.

D

Damage deposit: sometimes called a breakage deposit or security deposit. This is a refundable sum of money (typically around $200 or 10% of the rental rate) which a property owner collects from their guests in addition to the total booking amount. The deposit guarantees that guests return the property in the same condition they found it. In case of damages, the property owner will make appropriate deductions from the damage deposit.

Damage protection insurance: a product that the traveler purchases, usually when paying for their booking. This one-off insurance cost is around $50 to $100 per stay and is bought instead of leaving a damage deposit.

Damage waiver fee: a non-refundable fee that some owners collect in lieu of a damage deposit. Usually, damage waivers are significantly less than damage deposits, around $25-$100, depending on the property.

Deeded access: a written and filed right to have complete access to a certain property. For example, if you purchase property near a lake but not on the shorefront, your house might have deeded access through the neighboring land to get to the lake.

Default rate: the standard base rate for your property that will always be applied, unless there is a seasonal or weekend rate.

Deposit refund: the act of returning the amount that renters have paid for the damage deposit (provided everything has been left in the same condition).

Depth of inventory: the number of similar units that are available to rent in a specific area.

Direct booking: when a guest books directly via the property owner or manager’s website, rather than through a third-party distribution channel.

Distribution channel: third-party websites for advertising properties online, such as Airbnb, Booking.com, Vrbo, etc.

Domain name: your website name, the address on the internet where users can access your website.

Down payment: partial payment guest makes at the time of booking in order to secure a reservation, usually a percentage of the total amount.

Dynamic pricing: the practice of varying the price for rooms or properties to reflect changing market conditions. In particular, charging higher prices at a time of greater demand.

E

Electronic keyless lock: a digital or push-button mechanical lock that does not require a key or access card to operate.

Equity: a homeowner’s financial interest in a property. Equity is the difference between the fair market value of the property and the amount that is still owed on its mortgage.

Eviction: the lawful expulsion of an occupant from any property.

Exit strategies: a predetermined plan that takes into account everybody’s interest in a joint ownership arrangement. An exit strategy gives a business owner a way to reduce or liquidate their stake in a business and, if it’s successful, make a substantial profit.

Expenses: offset (an item of expenditure) as an expense against taxable income. For vacation rentals, deductible expenses can include repairs, maintenance, cleaning, insurance, marketing costs, accounting fees, property supplies, vacant rental property and depreciation to name a few.

F

Fair Housing Act: the 1968 Fair Housing Act is a federal act in the United States intended to protect the buyer or renter of a dwelling from seller or landlord discrimination based on race, color, religion, sex, handicap, familial status or national origin.

Fair Market Value (FMV): an estimate of the market value of the property that is based on what a knowledgeable, willing, and unpressured buyer would likely pay to a seller in the market.

Fixed-rate/fixed-term mortgage: fixed rate mortgages have an interest rate that stays the same for an agreed period of time.

Fixer-uppers: a real-estate property that will require maintenance work (redecoration, reconstruction or redesign), though it usually can be lived in as it is. Fixer-upper houses are usually offered for sale at a low price.

Flood insurance: specific insurance coverage against property loss from flooding. Flood insurance is a requirement in federally designated flood areas.

FSBO (For Sale By Owner): When a homeowner chooses to sell a home by himself or herself rather than go through a listing agent or company.

G

Global Distribution System (GDS): a computerized network system owned or operated by a company that enables transactions between travel industry service providers, such as airlines and accommodation.

Gross booking revenue: the total retail value of transactions, recorded at the time of booking. Bookings include the total price due including taxes, fees and other charges, and are generally reduced for cancellations and refunds.

Guest experience: a derived term for customer experience for the hospitality industry. Open to interpretation, but usually regarded as starting when the traveler has the first interaction with your brand online and never really ending (provided you have their contact details and can continue the relationship after check-out).

Guest fee: additional guest charges beyond the initial price. For example, a guest fee can refer to a service fee, cleaning fee, pet fee or extra person fees.

Guest screening: a process used by property owners and managers to get to know and evaluate prospective guests before allowing them to rent their home.

H

HOA (Homeowners’ Association): the association that makes and enforces rules for the properties and their residents in certain communities, complexes and neighborhoods. The HOA is also often responsible for the maintenance, upkeep and financial management of common areas.

Holiday lets: The term for vacation rental homes in the United Kingdom.

Homeowners insurance: a form of property insurance that covers losses and damages to an individual’s house and to assets in the home. Homeowners insurance also provides liability coverage against accidents in the home or on the property.

House rules: set by the host to cover anything that’s important for guests to know during their stay at a property. They are an ideal opportunity to clearly state what you expect of guests, what they can and can’t do and what penalties will occur if the house rules are broken.

I

iCal connection: simple but classic connection used to synchronize calendars with closed periods to block periods of unavailability.

Installments: breaking up payments into equal, partial payments.

Instant booking: the reservation method which doesn’t require approval from the host before guests can book them. Guests can choose their travel dates, book and pay without speaking to the host first.

Invoice: a document which helps guests keep track of their expenses and can be also used as proof of payment.

K

Key drop box: a key collection/return method which involves depositing keys in a trusted, secure box in a public place, i.e. in a local store.

Key Performance Indicators (KPIs): KPIs are a set of quantifiable measures that a company uses to gauge its performance over time. KPIs can help determine how successful the vacation rental business is. Some numbers to track are occupancy rate, ADR, conversion rate, etc.

L

Length of Stay (LOS) pricing: pricing strategy which offers a discount for stays that are longer in duration. For example, the longer the guest stays, the cheaper it is per night.

LIBOR (London Interbank Offered Rate): a benchmark interest index used for setting the rates of various adjustable-rate financial instruments.

Licenses: depending on the location, certain documents are required before you can legally rent out space within your home to travelers.

Listing site: see OTA.

Lockbox: a small safe that is attached to your vacation rental and contains the keys to your property. Lockboxes come in a variety of sizes and either have a single code that never changes, or can be re-coded by the owner.

Low season: see Off-peak season.

M

Managed distribution: any services which help vacation rental managers improve their online property distribution. For example, assistance with increasing revenue, adjusting nightly rates, managing payments and accounting, or listing the property on additional channels.

Mapping: process in which a room or property in a PMS is set up to synchronize with its equivalent in an OTA.

Markup: a price increase on certain channels, typically to guarantee revenue profit on third-party sites which charge commissions.

Merchant of record: the entity or party that is authorized to charge the guest’s credit card for the booking.

Metasearch engine: is a platform which uses another search engine’s data to produce its own results. These are common in the travel industry, with examples being Kayak and Trivago.

Minimum stay: the minimum number of nights that a booking must be for the owner to accept the reservation. Some owners will adapt their minimum stay settings for high season to increase revenue and reduce turnover.

Multi-unit: a set of indistinguishable properties. The decision of which specific property the guest will stay in is up to the property owner. A good example of a multi-unit property is a set of identical hotel rooms.

N

Net rate: the total amount that a property owner receives from a distribution channel (such as Vrbo or HomeAway) after the commission has been deducted.

No-show: the case where some guests with a reservation do not show up to use the property they have reserved, without explicit cancellation.

Non-refundable rates: typically lower rates which have special booking conditions. For example, guests will still have to pay the full price if they cancel, make changes or don’t show up. In other words, they will not receive a refund in the event of cancellation.

O

Occupancy: the proportion of accommodation which is booked or being used.

Occupancy forecast: the occupancy that the property is expected to achieve for a specified period of time.

Occupancy rate: the number of booked nights divided by the sum of the available nights and booked nights.

Off-peak season: the time of year when fewer people travel to a destination and prices are usually at their lowest. Also called the low season.

Online payment service: fast and convenient web-based payment services, e.g. PayPal, that allow automatic money transfers over the internet, or directly from a credit card and/or personal checking account.

OTA (Online Travel Agency): online, third-party agents whose websites list accommodation and sell them through their own network. Examples of popular OTAs are Vrbo, HomeAway, Airbnb, Expedia, Booking.com etc.

OTA ranking: the position of your listing on a search results page, as determined by an algorithm. Usually, the OTA ranking is influenced by factors such as photo quality, response time, reservation click ratio and review number and quality.

Outdoor amenities: the desirable or useful features of a property’s exterior. For example, a swimming pool, fire pit or outdoor kitchen.

Outsourcing: the business practice of hiring an outside party to undertake services that were traditionally carried out in-house by the company’s own employees. Examples of this would be check-in, cleaning and turnover services or even property management.

Owner’s closet: locked closet that inside the vacation rental property which stores the owner’s personal items. Usually off-limits for renters.

Owner revenue: the amount of money the property owner receives after the vacation rental manager takes their commission from the total revenue

Overbooking: more bookings then the available rooms or properties.

P

Payment gateway: an e-commerce application that authorizes payments for online businesses, usually via credit or debit card. It is the virtual equivalent of a physical point of sale terminal.

Payment scheduling: splitting booking amounts into two or three payments, instead of charging 100% at the time of booking. Subsequent payments will be charged from the guest’s credit card automatically.

PCI compliance: payment card industry compliance is a set of standards and guidelines for companies to manage and secure credit card related personal data during and after financial transactions. PCI compliance is required by all card brands.

Peak season: the time of year when more people travel to a destination and prices are usually at their highest. Also called the high season.

Pet fee and deposit: a sum of money beyond the total rental rate which covers the stay of any pet and costs associated with it (i.e. cleaning). Pet fees are non-refundable, but pet deposits should be refunded if no damage has incurred during the stay.

Pet-friendly: a property which allows pets to stay and is suitable for them.

Phishing: cybercrime in which a target is contacted by email, telephone or text message by someone posing as a legitimate institution to lure individuals into providing sensitive data such as personally identifiable information, banking and credit card details, and password.

PMS: property management system is a software which facilitates the management of rental properties. This includes reservations and booking calendar, guest communication, rates, listings on other channels, property information and more.

Price per guest: pricing strategy where rates differ depending on the number of guests staying.

Pricing structures: a system of offering different rental rates for different rental seasons.

Promotions: a bonus on a vacation rental (for example, “3rd night free when you book midweek!”) or a special discount for Black Friday.

Property: A vacation rental home.

Property description: content on your website or listings which tells your property’s story, gives your home a voice and convinces readers to book your rental.

Property group: a group of vacation rental properties that have very similar qualities and amenities. Often, rental managers will price these properties together.

PTBA: “preparation time before arrival”, also known as release days. The minimum number of days in advance a booking has to be made, e.g minimum two days before arrival. This allows property managers to gain better control of last-minute bookings and gives them time to prepare for the guest’s arrival.

Q

Qualified rate: a rate that the guest must qualify for, such as a corporate rate or a promotional package rate with specific booking conditions.

R

Rack rate: the official or advertised price of a room or property per night, on which a discount is usually negotiable.

Rate parity: a legal agreement between a property and an OTA, providing the same rates for the same room on all the distribution channels – including the property website.

Release days: see PBTA.

Rental agreement: a legally binding document between homeowner and guest which clarifies in writing any arrangements that have been made between the two parties, including house rules and repercussions if broken.

Repeat guests: loyal guests who return to a property after having stayed there previously.

Reputation management: the process of identifying what other people are saying about your business and taking steps to make sure that the general opinion is in line with your company goals.

Reservation deposit: an amount of money (usually equivalent to one night’s stay) collected at the time of booking which validates the rental contract. The purpose of the advance deposit is to guarantee a reservation, and the full amount is applied to the guest’s bill upon check-out.

Return on investment (ROI): a performance measure used to evaluate the efficiency of an investment (or compare the efficiency of a number of different investments). To calculate the ROI of a vacation rental, the benefit (or return) of the property is divided by the cost of the property.

Revenue management: the use of analytics to track a vacation rental (or group of rentals) and their performance over time. This helps the owner or distribution channel to maximize revenue and growth.

Reviews: feedback from previous guests about a property. Reviews are a powerful tool for attracting new bookings and encouraging loyal guests.

RevPAR: revenue per available room is a performance metric used in the accommodation industry. RevPAR is calculated by multiplying the average daily room rate (ADR) by its occupancy rate. It can also be calculated by dividing the total amount of revenue by the number of available nights.

Room type: different categories of room available at a property or properties. Images and descriptions of main features and amenities applying to each room category will usually be included on the property website and across its distribution channels. Prices tend to vary for different room types.

S

Sales tax: most states in the US require people who rent out their vacation homes to charge and collect state sales or lodging taxes on the income they earn from these short-term rentals. These taxes are collected by the state, county and/or city, and like all sales taxes, they are paid by the guest, not the host.

Scam: a fraudulent scheme to gain money. As the industry grows, scams are becoming more and more popular. Warning signs to look out for are: a lack of basic language skills, strange email addresses, unwillingness to pay via your preferred method, last-minute or same-day bookings and uncertainty or too much flexibility on travel dates.

Seasonal rates: increased lodging costs during popular times to travel. Rates are typically higher because the particular destination is desirable. Often, this is because of climate, attractions or events that are happening in the area.

Security deposit: see Damage deposit.

Self-catering accommodation: accommodations that usually include private or shared kitchen facilities where guests are able to make their own meals.

Sell rate: final price displayed to the guest, including all fees.

Shoulder season: a travel period between peak and off-peak seasons.

Smart locks: a Wi-Fi or Bluetooth-enabled smart home device that allows users to lock and unlock a door by sending secure signals from a mobile application on their smartphone, computer or tablet. Smart locks provide remote, keyless access to a property.

SNAD: significantly not as described – a term used in disputes for properties which do not look anything like they appeared online.

Social proof: is evidence that other people have purchased and found value in a product or service offered by a business. In the case of vacation rentals, social proof can be found in the form of reviews from past guests, social media posts from them, social shares, or even badges showing media mentions in local or national newspapers, blogs and other publications.

Superhost: term on Airbnb for experienced hosts who provide a leading example for other hosts and extraordinary experiences for their guests.

Sustainable tourism: tourism that takes full account of its current and future economic, social and environmental impacts, addressing the needs of visitors, the industry, the environment and host communities.

T

Themed vacation rental: a property which takes on certain motifs either in the entire property or some rooms. For example, depending on the target guests this may be location-based themes like mountain or beach or popular TV shows and Disney movies. Themed properties are rising in popularity and can make a vacation rental stand out from the competition by providing a magical experience.

Third-party distribution: websites and companies that show information for a vacation rental. Examples of this include Tripping.com and Tripping.com’s partner sites, such as VRBO and HomeAway.

Timeshare: the arrangement whereby several joint owners have the right to use a property as a holiday home under a time-sharing scheme. Most often this is limited to one or two weeks per year.

Traveler fee: see Guest fee.

V

Vacation rental: the renting out of a furnished apartment, house or professionally managed resort-condominium complex on a temporary basis to tourists as an alternative to a hotel.

Vacation rental software: a cloud-based program which allows you to build a website, accept direct bookings with online payments, connect to key third-party distribution sites and manage all your reservations and guest communications from one place.

Value-added items: additional amenities which could increase the occupancy level of a property. For example, high chairs, hot tubs, pool tables and sofa beds are all value-added items.

Villa holiday: preferred term in Europe, villa rental or villa holiday refers to detached houses in warm climates.

VRMA: the Vacation Rental Management Association provides best-in-class education, networking and professional development opportunities to make a difference for you and your company.

VRM commission: a fee that is charged by a vacation rental management company to the owner of the rental. This is usually a percentage of the rental revenue rather than a specific amount.

W

Website: a set of related webpages located under a specific domain name.

Website template: a pre-designed webpage (or set of webpages) that anyone can use to easily create their own website (even without any design or programming skills).

Weekend pricing: pricing strategy where you add different rates per night for Thursdays, Fridays and Saturdays.

Welcome app: a website or mobile app that is designed to enrich the guest experience. It will provide guests with everything they need to know before and during their stay. In some cases, guests can chat with the host via the digital welcome app, as well as book local activities or add-ons.

Welcome book: similar to a welcome app, but a physical book for the guests to hold. In a welcome book, hosts can compile all important information into one place, helping to reduce questions from guests while reinforcing their impression of you as an organized owner.

Welcome letter: introduces guests to your property, even when you can’t be there in person. The welcome letter has one main purpose: to give guests a personal, warm reception to your home.

Wire transfer: see Bank transfer.

X

XML: XML is a format for structuring data in communication between systems.

Y

Yield management: a variable pricing strategy, based on understanding, anticipating and influencing traveler behavior in order to maximize revenue or profits from a vacation rental.