Check out market updates

Short term rental glossary for hosts

Decoding Short-Term Rental Jargon: A Must-Have Glossary for Hosts

Whether you’re a seasoned host or just dipping your toes into the hospitality industry, navigating the realm of short-term rentals can sometimes feel like learning a new language. As you embark on your journey into this realm of hospitality, you may find yourself confronted with a plethora of unfamiliar terms and jargon unique to the industry. From deciphering booking platforms to understanding guest preferences, there’s a whole dictionary of terms to familiarize yourself with. In this blog, we’ll embark on a journey to demystify the terminology surrounding short-term property management, equipping you with the knowledge you need to thrive in this dynamic market. So, let’s dive in and start unraveling the ultimate short-term rental dictionary together!

Understanding Short-term Rental Dictionary

A short-term rental dictionary is a comprehensive compilation of terminology and jargon specific to the realm of short-term rentals, designed to provide clarity and understanding to homeowners, hosts, property managers, and investors navigating this dynamic industry.

The need for a short-term rental dictionary arises from the unique and evolving nature of the short-term rental market. As the popularity of platforms like Airbnb, Vrbo, and continues to soar, more individuals are entering the space as hosts or investors. However, many of these newcomers may be unfamiliar with the specialized language and terminology used within the industry.

Segregating Short-term Rental Dictionary

Short-term rental jargon encompasses a wide range of terms related to property management, guest experiences, regulatory considerations, and financial aspects. Some examples of common jargon include:

Short-Term Rental Income Metrics:

ADR (Average Daily Rate): The average rental income earned per night.

  • Imagine you have a vacation rental property listed on Airbnb. In January, you rented out the property for a total of 20 nights, generating a total rental income of $2,000. The average daily rate for January would then be calculated as $2,000 divided by 20 nights, resulting in an ADR of $100 per night.

RevPAR (Revenue per Available Room): A performance metric calculated by dividing total room revenue by the number of available rooms.

  • Suppose you own a beachfront condo listed on a short-term rental platform. In a particular month, you generated total rental revenue of $5,000, and your condo was available for booking for 25 nights during that month. The RevPAR would be calculated as $5,000 divided by 25 nights, resulting in a RevPAR of $200 per available room per night.

Also Read: Should you invest in condos for home rental property?

GOPPAR (Gross Operating Profit per Available Room): The gross profit generated by each available room after deducting operating expenses.

  • Let’s say you manage a portfolio of short-term rental properties. After deducting operating expenses such as cleaning fees, maintenance costs, and property management fees, you determine that the total gross operating profit generated across all your available rooms for a specific period is $10,000. If during that period, you had a total of 50 available rooms, the GOPPAR would be calculated as $10,000 divided by 50 rooms, resulting in a GOPPAR of $200 per available room.

NRR (Net Rental Revenue): The revenue generated from rental income after subtracting expenses such as cleaning fees and maintenance costs.

  • Consider you own a mountain cabin listed on a short-term rental platform. In a given month, you earned $3,000 in rental income. After subtracting expenses such as cleaning fees ($200) and maintenance costs ($300), your net rental revenue would be calculated as $3,000 – $200 – $300 = $2,500.

Rental Yield: The percentage return on investment generated by a rental property, calculated by dividing the annual rental income by the property’s value.

  • Suppose you purchased a vacation home for $300,000 and generated $30,000 in rental income over the course of a year. To calculate the rental yield, divide the annual rental income ($30,000) by the property’s value ($300,000) and multiply by 100 to express it as a percentage. In this case, the rental yield would be (30,000 / 300,000) * 100 = 10%.

Short-Term Rental Occupancy Terms:

Occupancy Rate: The percentage of time a property is occupied by guests, calculated by dividing the number of occupied nights by the total number of available nights.

  • If your vacation rental property was available for booking for 30 nights in a month and guests stayed for a total of 24 nights, the occupancy rate would be (24 / 30) * 100 = 80%.

Nights Booked: The total number of nights for which a property has been reserved by guests.

Suppose you manage a cabin in a popular ski resort. In February, guests booked your property for a total of 28 nights.

Booking Lead Time: The amount of time between the date of booking and the guest’s arrival date.

  • A guest makes a reservation for your beach house on Airbnb, with their arrival date set for two weeks later. The booking lead time in this case would be two weeks.

Peak Season: The period of highest demand for short-term rentals, often characterized by increased occupancy rates and higher rental prices.

  •  If you notice that demand for your vacation rental property surges during the summer months, with higher occupancy rates and increased rental prices, you can identify the summer season as the peak season.

Blackout Dates: Dates during which a property is not available for booking, typically reserved for maintenance or personal use by the homeowner.

  • You decide to block off your vacation rental property during the Christmas holidays for personal use, making those dates unavailable for guest bookings.

Also Read: How to maintain high occupancy rates year round in rental property

Short-Term Rental Expenses:

Cleaning Fee: The fee charged to guests to cover the cost of cleaning the rental property between stays.

Maintenance Costs: Expenses incurred for repairing and maintaining the rental property, including routine maintenance tasks and repairs.

Utilities: The costs associated with electricity, water, gas, and other utility services provided to the rental property.

Property Management Fee: The fee charged by property management companies for their services, which may include listing optimization, guest communication, and maintenance coordination.

Insurance Premiums: The cost of insurance coverage for the rental property, including liability insurance, property insurance, and vacation rental insurance.

Financing a Short-Term Rental Property:

Financing a short-term rental property refers to obtaining the necessary funds or loans to purchase or invest in a property intended for short-term rental purposes. Unlike traditional long-term property management, financing options for short-term rentals may vary due to the unique nature of this investment strategy. Lenders may consider factors such as the property’s potential rental income, occupancy rates, and market trends when evaluating loan applications for short-term rental properties.


Suppose you identify a charming cottage in a tourist destination that you believe would make an ideal short-term rental property. To finance the purchase, you approach a lender and provide details about the property’s rental potential, including projected occupancy rates and rental income estimates based on market research. The lender may offer specialized financing options tailored to short-term rental investments, taking into account factors such as the property’s location, demand, and historical performance in similar markets.

In Conclusion –

Mastering the jargon of the short-term rental industry is essential for homeowners, hosts, and investors looking to thrive in this dynamic market. Understanding key terms related to income metrics, occupancy rates, expenses, and financing empowers individuals to make informed decisions, optimize their properties, and maximize profitability. 

By delving into the nuances of short-term rental jargon, you equip yourself with the knowledge and confidence needed to navigate the complexities of this ever-evolving industry successfully. Whether you’re a newcomer or a seasoned professional, incorporating these terms into your vocabulary will prove invaluable as you embark on your journey in the exciting world of short-term rentals.

Leave a Reply

Your email address will not be published.