The share of profit an operator earns above the base management fee, typically a percentage of GOP or a level tied to owner returns; it aligns the operator with bottom-line performance, not just revenue.
Related terms
- Key money
An upfront payment or capital contribution a brand makes to an owner to win a management or franchise deal, common in competitive Gulf markets where operators…
- Keys
Industry shorthand for the number of hotel rooms in a property.
- Management contract
An arrangement where an operator runs a hotel for a fee while the owner retains ownership.
- Market penetration index (MPI)
A hotel's occupancy divided by its competitive set's occupancy, indexed to 100; it isolates share of demand (heads in beds) separately from rate performance.
- Occupancy
The share of available rooms sold in a period.
- Pipeline (hotel)
The set of hotels signed, under construction, or approved but not yet open in a market; a heavy pipeline signals future supply pressure on occupancy and rate,…
- Rack rate
A hotel's published, undiscounted room rate before any corporate, negotiated, or promotional deal; almost no guest pays it, but it sets the ceiling against whi…
- Ramp-up
The period after opening during which a hotel builds toward stabilised performance.