Pearson New International Edition International pcl tp indd 1

FRONT OFFICE SEMANTICS
Cost per key:
Average purchase price of a hotel’s guestroom expressed in thousands of dollars. For
example, a 200-room hotel offered for $12 million is selling at a cost of $60,000 per key ($12,000,000 
200
rooms 
$60,000). Sometimes called 
cost per room.
Another method of rate determination involves basing rates on the square
footage of guestrooms (assuming that a hotel’s larger rooms should sell for more than
its smaller rooms). Rates have also been determined by various “ideal” sales levels of
the different hotel room types available to be sold. These rates include those derived
from bottom-up selling (selling the hotel’s least-expensive rooms first), top-down
selling (selling the hotel’s most expensive rooms first), and pricing schemes that con-
sider an equal sale of higher- and lower-priced rooms.