Vacation Rental Industry Glossary: A Complete List of Terms

Vacation Rental Industry Glossary: A Complete List of Terms

vacation rental industry glossary
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1031 exchange: A transaction under United States law where an asset (e.g. real estate property) is sold and then the proceeds of the sale are reinvested in a similar asset. As such, no gain or loss is recognized and the capital gains tax that would've been due on the first sale is deferred.

A

Accessible vacation rental: a property that's accessible to people in wheelchairs and people with disabilities.

Adjustable-rate mortgages: A mortgage where the interest rate is periodically adjusted.

Advance payment: a portion of the whole rent amount paid by the guest before their arrival.

Advertised price: the price per night shown to the guest.

Airbnb business plana set of rules, goals and a plan to grow your short-term rental business.

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

Alternative agreement: A type of agreement where vacation rental managers buy out all of the homeowner's available rental dates in a single transasction, guaranteeing income to the homeowner.

Amenities: the desirable or useful elements of a property, like a pool, heating, or an outdoor patio.

Amenity fee: an extra amount guests pay to access certain amenities.

American Society of Home Inspectors (ASHI): a non-profit professional association for home inspectors to set and promote standards for property inspections. 

API: Application Programming Interface, something that allows two computer programs to communicate.

API integration: a full connection between two software platforms that allow data sharing. For example, if your channel manager has an API integraton with Airbnb, it will connect directly to your account and remove a manual step for you.

Availability calendar: an online calendar that shows which day the property is available.

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

Available nights: the total number of nights that a property is available to be booked.

Average Daily Rate (ADR): the average daily rate measures the average rental income per paid room over a given period of time.

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 given period of time.

Average Rate Index (ARI): your property's average daily rate compared to that of your competitors.

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 where the guest directly sends the host money through their banks.

Bartered services:  exchanging a stay at a short-term rental property for goods or services.

Best Available Rate (BAR): best available rate is the lowest rate that guests can book your listing at. 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.

Billboard effect: a theory that if you listing your property on multiple portals or OTAs, you will receive more exposure and more bookings.

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

Booking curve: a tool that visually shows how bookings change over, helping property managers to decide how to adjust rates and availability.

Book direct: This feature allows your guests to book directly with the property manager without having to go through an OTA.

Booking engine: an application or software used on accommodation websites to book properties.

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

Booking pace: the time period between the booking date to the arrival date. This helps you track how fast people book.

Booking policy: 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. Opposite of Instant Book.

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 formula/ break-even point: when monthly rental income is at least equal to all the operating expenses and bills associated with owning and operating the property.

Broom clean:  the condition or cleanliness of a home. Broom-clean homes are usually free of personal items and have been swept and dusted.

Buyer’s agreement: a signed document between you and a selling agent, where the agent agrees not to show anyone else a specific property until you confirm that you are no longer interested in buying it.

C

Call-to-Action (CTA): a prompt on a website that tells the user to take some specified action (e.g. "Book now").

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

Cancellation policy: the terms describing what happens if a guest cancels their reservation within a certain notice period.

Canned responses: pre-written or template responses to common questions like "what's the wifi password?".

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

Channels: websites where owners canlist their properties.

Channel fee: a commission the a property owners pays a third party to list their vacation rentals on their website. 

Channel manager: a tool which centralizes third-party distribution sites onto a single platform managing reservations. Channel managers typically synchronize calendar availabilities, and some synchronize additional features.

Check-in: the formal registration of 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 for cleaning their property after a guest's stay.

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

Co-host: somebody that the listing owner knows works with to help them manage their vacation rental property.

Comparative market analysis (CMA): a report on similar homes in the area that is used to get a value for the property in question.

Competitive set: a group of rental properties that are direct competitors to your property due to their parallel style and price and demographic. 

Complex: a building (or group of buildings) with multiple units for rent.

Compromise: choosing a property that meets most of your vacation rental property goals, but not everything you had in mind.

Condo hotel: a building with condos and hotel services (concierge, room service, etc.).

Conforming mortgage: The most typical way of purchasing a loan that is governed by industry standards. 

Connectivity: synchronization between a variety of platforms so that owners can gain more exposure of their properties to guests. 

Conversion rate: the number of travelers viewing a property online or making an inquiry who end up booking it.

Cosmetic upgrades: home improvements which impact, above all, the property’s look and feel (e.g. painting, new decoration, or new kitchen).

Custom fees: any additional fee that is unique to a property (e.g. a pool cleaning fee).

D

Damage deposit / breakage deposit/ security deposit: 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 to cover any damage the guest might cause.

Damage protection insurance: a product that the traveler can purchase when paying for their booking instead of paying for a damage deposit.

Damage waiver fee: a non-refundable fee that some owners collect in lieu of a damage deposit. 

Deeded access: a written and filed right to have complete access to a certain property, including paths to reach the property.

Default rate: the standard base rate for your property that is always applied.

Deposit refund: returning the amount that renters have paid for the damage deposit, if there is no damage to pay for.

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

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

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

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

Down payment: a payment guest makes when booking to secure a reservation, usually a percentage of the total amount.

Dual agency: when your buying agent is the same person who listed your home for sale.

Dynamic pricing: the practice of changing the price for rooms or properties based on day of the week, seasonality, flight & hotel demand, or other factors.

E

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

Equity: a 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 way  for a business owner to reduce or liquidate their stake in a business and  make a substantial profit.

Expenses: any expenses occurred in the operation of a vacation rental. 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 what a knowledgeable, willing, and unpressured buyer would likely pay to a seller for a property.

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).

Flood insurance: specific insurance coverage against property loss from flooding. 

FSBO (For Sale By Owner): When a homeowner chooses to sell a home by himself or herself rather than through an agency.

G

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

Gross booking revenue: the total amount of revenue made from bookings.

Guest experience: a  for customer experience for the hospitality industry. 

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

High-maintenance homes: Older homes that require frequent attention in both time and money due to unseen maintenance, and therefore very difficult to manage from a distance.

HOA (Homeowners’ Association): the association that governs the rules for the properties and their residents in certain communities, complexes and neighborhoods. 

Holiday lets: The UK term for vacation rental properties.

Homeowners insurance: a form of property insurance that covers losses and damages to an individual’s house and to assets in the home. 

House rules: where the host clearly states what's expected of guests, what they can and can't do and any further instructions. 

Hot tub cleaning fee: An extra fee charged to guests who will use the hot tub.

I

iCal connection: a connection used to synchronize calendars.

Installments: breaking up payments into smaller partial payments.

Instant Book: where guest can book without prior approval from the host.

Interest-only loans: A loan often tied to a fixed index in which you only pay the monthly interest without gaining equity.

Internet Service Provider (ISP): a service that sells access to the internet.

Invoice: a document listing the services or products provided and the price to pay.

Investment property loans: A loan for property owners who will use the property less than 14 days or less than 10% of the days it's rented.

K

Key drop box: a key collection/return method whereby the guest deposits or picks up the keys in a trusted, secure box in a public place.

Key Performance Indicators (KPIs): KPIs are a set of quantifiable measures that a company uses to gauge its performance over time. 

Key-Level Listing: When a rental property is part of a building with several units, a key-level listing describes one of these units in more detail.

L

Length of Stay (LOS) pricing: pricing strategy which offers a discount for stays that are longer than average.

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

Licenses: the documents required before you can legally rent out your home to travelers.

Listing site: see OTA.

Lockbox: a small safe that is attached to your vacation rental and where you keep the keys to your property. 

Low season: the time of year when the least amount of people travel to a destination. Also called the off-peak season.

M

Managed distribution: services that help vacation rental managers improve their online property distribution. 

Mapping: process in which a room or property in a property management software synchronizes with its listing 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 / merchant channel: the entity or party that is authorized to charge the guest’s credit card for the booking.

Metasearch engine: a platform which uses another search engine’s data to produce its own results (e.g. Kayak, Skyscanner).

Minimum stay: the minimum number of nights that a booking must be for the owner to accept the reservation. 

Multi-unit: a set of identical properties.

N

Net rate: the total amount that a property owner receives from an OTA after commission.

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

Nonconforming mortgage: When your financial situation doesn't fit into the governed loan guidelines. 

Non-refundable rates: lower rates with special conditions. For example, guests will not receive a refund if they cancel.

O

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

Occupancy Based Pricing: pricing strategy where the property manager changes rates depending on the number of guests

Occupancy forecast: the occupancy that the property is expected to get.

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

Off-peak season: see low season.

Online payment service: web-based payment services.

OTA (Online Travel Agency): online, third-party agents whose websites list accommodation and sell them through their own network (e.g. Airbnb, VRMO).

OTA ranking: the position of your listing on a search results page of an OTA.

Outdoor amenities: the desirable or useful features of a property’s outdoor area, like a pool or barbecue.

Outsourcing: the business practice of hiring a third party to perform services that you might have done in-house.

Owner’s closet: locked closet that inside the vacation rental property which stores the owner’s personal items. 

Owner revenue: the amount of money the owner receives after the property manager takes their commission.

Overbooking: more bookings then the available rooms or properties.

Over-improving: Adding improvements or expensive furnishings to your property which may make it nicer but won't help your revenue.

P

Payment gateway/ payment processer: an e-commerce application that authorizes payments for online businesses.

Payment scheduling: splitting booking amounts into two or three payments, instead of charging 100% at the time of booking. See installments.

PCI compliance: payment card industry compliance is a set of standards and guidelines for companies to handle credit card transactions.

Peak season: the time of year when the number of people traveling to a destination is highest. Also called the high season.

Pet fee / pet deposit: a fee guests pay if they are bringing a pet to the vacation rental.

Pet-friendly: a property which allows pets to stay.

Phishing: cybercrime in which a target is contacted by email, telephone or text message by someone posing as a legitimate institution to trick people into providing sensitive data.

Piggyback loans: a loan that allows you to buy one mortgage for the first 80% loan-to-value and a simultaneous second mortgage for an additional 10 to 15% of loan-to-value.

Piggyback marketing: pooling marketing efforts with peers to expand reach.

PMS: property management system  is a software which helps synchronize calendars and make it easier to manage a vacation rental.

Pool heating fee: a fee you charge guests for heating the pool.

Portfolio financing: using your current stock portfolio to finance a property by using a portion of your portfolio as collateral.


Pre-construction homes: properties that are sold before construction, usually at a discounted purchase price.

Pre-qualification: a verbal statement with no guarantees from a loan officer that you will qualify for a loan.

Pre-approved pending property: when a lender pre-approves how much money they're going to lend you.

Price per guest: pricing based on the number of guests

Pricing structures: different rental rates for different rental seasons.

Private mortgage insurance (PMI): insurance often required on loans exceeding the 80% loan-to-value range.

Promotions: a gift or bonus on a vacation rental (e.g. family & friends discount)/

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 short-term rental properties sharing similar features and amenities. 

PTBA: preparation time before arrival, also known as release days. The minimum number of days in advance a booking has to be made.

Q

Qualification: Otherwise known as pre-qualification. A verbal statement with no guarantees from a loan officer that you will or will not qualify for a loan.

Qualified rate: a rate that the guest must qualify for to get special booking conditions (like a military discount).

R

Rack rate: the listed or advertised price of a room or property per night.

Rate parity: a legal agreement between a property and an OTA, providing the same rates for the same room on every distribution channel.

Referred booking: a booking that results from the referral of a friend, neighbor, or past renter.

Release days: see PBTA.

Rental agreement: a legally binding document between homeowner and guest which lists any terms and arrangements made between both parties.

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

Representative Style Listing: a listing that represents a certain accomodation type in a multi-unit building or complex. 

Reputation management: knowing  what other people are saying about your business and managing what people are saying with calculated steps.

Reservation deposit: an amount of money collected at booking to confirm the reservation.

Resort Recreation Specialist (RRS): a real estate agent specialized in vacation rentals.

Reverse mortgages: A home loan that gives cash advances to the homeowner, requires no repayment until a future time, and is capped by the value of the home when the loan is repaid.

Return on investment (ROI): the amount of profit you make from an investment.

Revenue management: using analytics to track a vacation rental's performance and pricing.

Revenue Per Available Night:  the total amount of revenue from a vacation rental property divded by the number of available nights.

Revenue Per Available Room (RevPAR): the total room revenue in a hotel divded by the sum of the room count and number of days in the measurement period.

Reviews: feedback from guests about their experience at a property. 

Room type: different categories of room available at a property or properties. 

S

Sales tax: a tax collected by the State and paid by the guest.

Scam: a fraudulent scheme to make money by tricking people.

Screening guests: See guest screening.

Seasonal rates: rates based on the season. Typically they will be higher during peak season and lower during off season.

Security deposit: see Damage deposit.

Self-catering accommodation: accommodations that with  kitchen facilities where guests can make their own meals.

Self-directed IRA: An individual retirement account where you can choose your own investments.

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

Shared maintenance: Collaborating with your local peers by collectively hiring maintenance people or housekeepers.

Shoulder season: a 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 to provide keyless access.

SNAD: significantly not as described – when a property looks nothing like what it did online.

Social proof: testimonials, guest reviews, anything that shows that other people have enjoyed your listing.

Superhosta status that Airbnb gives experienced who meet certain criteria.

Sustainable tourism: tourism that takes full account of its current and future economic, social and environmental impacts.

Sweat equity: helping a property in the form of labor or services rather than cash.

T

Themed vacation rentala property that is designed with a specific theme in mind. Like a pirate, Harry Potter or 50s theme.

Third-party distribution: websites and companies that distribute vacation rental listings.

Timeshare: when several joint owners can each use a vacation rental home during a certain period of time, agreed in advance. 

Title insurance: insurance that eliminates the risk that the seller doesn't legally own the property.

Traveler fee: see Guest fee.

V

Vacation rental: renting out a home to travelers on a short-term basis.

Vacation rental software: see property management system.

Vacation rental website builder: a website building software designed specifically to build websites for vacation rentals, including the booking engine.

Value-added items: additional amenities wwith value to the guests (e.g. hot tub, pool, high chairs).

Villa holiday: villa rental or villa holiday refers to detached houses in warm climates.

VRMA: the Vacation Rental Management Association is an associationeducation, networking and professional development opportunities for short-term rental operators.

VRM commission: a fee that is charged by a vacation rental management company to the owner of the rental. 

W

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

Website template: a pre-designed webpage that anyone can use to easily build their own website.

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

Welcome app: a website or mobile app to help the guest make the most of their experience. It provides them with everything they need to know before and during their stay. 

Welcome book: similar to a welcome app, but a physical book for the guests to hold. 

Welcome letter: a letter introducing guests to your home.

Wire transfer: see Bank transfer.

X

XML: 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.

 

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