Seattle Hospitality Industry: Glossary of Key Terms

The Seattle hospitality industry operates within a layered framework of operational, regulatory, and commercial terminology that shapes daily decision-making for operators, workers, and investors. This glossary defines the core vocabulary used across hotels, restaurants, events, tourism, and workforce management in the Seattle market. Understanding these terms is foundational to interpreting licensing requirements, labor obligations, performance benchmarks, and sector classifications that govern the industry locally and under Washington State law.

Definition and scope

Hospitality industry refers to the commercial sector providing lodging, food and beverage service, event facilitation, and related guest experiences. In the Seattle context, this encompasses licensed hotels, motels, short-term rentals, full-service and quick-service restaurants, bars and taverns, banquet and conference facilities, tour operators, and cruise embarkation services.

The following terms carry specific operational and regulatory meaning within this sector:

• ADR (Average Daily Rate): The average revenue earned per occupied hotel room per day. ADR = total room revenue ÷ number of rooms sold. It is a primary performance metric tracked by sources such as STR (CoStar Group).
• RevPAR (Revenue Per Available Room): RevPAR = ADR × occupancy rate. Unlike ADR, RevPAR accounts for unsold inventory, making it the standard profitability benchmark across lodging properties.
• Occupancy Rate: The percentage of available rooms sold during a given period. Formula: rooms sold ÷ rooms available × 100.
• F&B (Food and Beverage): The segment of hospitality operations covering all food preparation and alcohol/non-alcohol beverage service, governed at the state level by the Washington State Liquor and Cannabis Board (WSLCB) for licensing.
• Front of House (FOH): Guest-facing operational areas including reception desks, dining rooms, bars, and concierge services.
• Back of House (BOH): Non-guest-facing operations including kitchens, housekeeping staging, laundry, and administrative offices.
• GOP (Gross Operating Profit): Total revenue minus total operating expenses before fixed charges such as debt service and capital expenditures.
• GOPPAR (Gross Operating Profit Per Available Room): GOP divided by total available rooms; a deeper hotel-efficiency metric than RevPAR.
• TRevPAR (Total Revenue Per Available Room): Captures all hotel revenue streams (rooms, F&B, spa, parking) per available room, not room revenue alone.
• Short-Term Rental (STR): A furnished residential unit rented for fewer than 30 consecutive days, regulated in Seattle under Seattle Municipal Code Title 23 and requiring a Seattle business license and STR operator license.
• Transient Occupancy: Guest stays of fewer than 30 days, subject to Washington State's 10.1% combined lodging and convention taxes (Washington Department of Revenue).
• Covers: The count of individual meals served in a restaurant during a service period — a primary volume metric in F&B operations.
• Turn: A single cycle of seating, service, and table reset in a restaurant. High-volume establishments in Seattle's Capitol Hill or Pike Place Market corridors may target 3 or more turns per service period.

The how-seattle-hospitality-industry-works-conceptual-overview page explains how these components interact as an integrated operating system.

How it works

These terms function as measurement and communication standards that allow operators, investors, and regulators to speak a common language. ADR and RevPAR, for example, are reported monthly to benchmarking firms such as STR, which aggregates data to produce competitive set (comp set) reports. A comp set is a defined group of 5 to 10 comparable properties against which a hotel measures its own performance.

Labor-specific vocabulary is equally critical. Under Seattle's Minimum Wage Ordinance (SMC 14.19), the distinction between a large employer (more than 500 employees globally) and a small employer (500 or fewer) determines the applicable minimum wage tier. As of 2024, the large-employer minimum wage in Seattle reached $19.97 per hour (Seattle Office of Labor Standards). The seattle-hospitality-labor-laws-and-worker-rights page addresses these classifications in detail.

A banquet event order (BEO) is the contract document governing a specific event — specifying room setup, menus, AV requirements, staffing ratios, and billing. The BEO becomes the operational blueprint shared between the event sales team, catering manager, and execution staff.

Revenue management is the practice of adjusting room rates dynamically based on demand forecasting, competitive pricing, and channel mix. It relies on a channel manager — software that synchronizes inventory across online travel agencies (OTAs) such as Expedia and Booking.com, the property's direct booking engine, and global distribution systems (GDS).

Common scenarios

1. Hotel performance review: A general manager compares the property's RevPAR against the comp set index (RGI — Revenue Generation Index). An RGI above 1.0 indicates the property is outperforming its competitive set on a revenue-per-available-room basis.
2. Restaurant labor scheduling: An F&B director uses projected covers and historical revenue-per-cover data to set FOH staffing levels, ensuring compliance with Seattle's Secure Scheduling Ordinance (SMC 14.22), which requires advance notice of 14 days for hourly worker schedules.
3. Short-term rental compliance: An operator listing a Capitol Hill unit on a platform must hold a valid Seattle STR operator license and collect Washington's combined 10.1% lodging tax (Washington Department of Revenue).
4. Convention sales: A sales manager preparing a multi-day conference proposal at the Washington State Convention Center will build a pickup block — a contracted room block held at a negotiated rate for event attendees — and track attrition (the penalty applied when a group fails to fill the contracted percentage of its room block, typically 80–90%).

Decision boundaries

ADR vs. RevPAR: ADR measures pricing efficiency; RevPAR measures combined pricing and occupancy efficiency. A property can post a high ADR while suffering low RevPAR if vacancy is elevated — making ADR alone an insufficient performance signal.

Large employer vs. small employer: Under SMC 14.19, the 500-employee threshold is calculated globally across all locations of a franchise or chain, not solely at the Seattle unit. A franchisee operating a single 40-room Seattle property under a national brand may still qualify as a large employer depending on the franchisor's total headcount structure.

FOH vs. BOH tip eligibility: Washington State law (RCW 49.46.020) prohibits tip pooling arrangements that include BOH employees except under specific conditions aligned with the federal Fair Labor Standards Act, 29 U.S.C. § 203(m). Operators must classify roles correctly before implementing service charge distribution policies.

Transient vs. extended stay: Stays of 30 or more consecutive days are not subject to Washington's lodging excise tax under RCW 82.08.010, distinguishing extended-stay hotel guests from short-term transient occupants.

The full operational picture of the Seattle hospitality sector — including economic scale, workforce composition, and neighborhood-level variation — is available through the Seattle Hospitality Authority home directory.

Scope, coverage, and limitations

This glossary covers terminology as it applies within the City of Seattle's municipal jurisdiction, governed by Seattle Municipal Code and Washington State law. It does not address:

• Hospitality operations in adjacent cities such as Bellevue, Redmond, or Tacoma, which fall under separate municipal codes.
• Federal hospitality regulations beyond those specifically referenced (e.g., FLSA, ADA Title III) where Washington State or Seattle rules create the operative standard.
• Tribal gaming and hospitality enterprises, which operate under federal and tribal sovereign frameworks outside Seattle's municipal jurisdiction.
• Airport concession operations at Seattle-Tacoma International Airport (Sea-Tac), which fall under Port of Seattle and King County jurisdictions, not City of Seattle licensing authority.

Operators seeking guidance on King County lodging tax obligations (levied separately from Seattle's city lodging tax) should consult King County Finance and Business Operations.

References

• Washington State Liquor and Cannabis Board (WSLCB)
• Washington Department of Revenue — Lodging Taxes
• Seattle Office of Labor Standards
• Seattle Municipal Code — Title 14 (Civil Rights)
• Seattle Municipal Code — Title 23 (Short-Term Rentals)
• Washington State Legislature — RCW 82.08.010 (Sales Tax / Lodging)
• [Washington State Legislature — RCW 49.46.020 (Minimum Wage Act)](https://app.leg.wa.gov/RCW/default.aspx?cite=49