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Hotel Math 101,

The Metrics used by the Hotel Industry


The SHARE Center
Supporting Hotel-related Academic Research and Education

Outline
Property Data
Comp Set Data
Industry Data
Corporate Data
International Issues
Additional Data

Property Data

How Does STR Obtain Raw Data?


Most raw property sales data is directly exported from
the systems of the hotel companies. This help
increase the reliability of the data. Companies send
STR a raw data file each month, week, and/or day.
Some hotels and
smaller companies
enter the data on the
STR web site. The
web site can be used
to enter monthly or
daily data.

Sample Raw Data


Here is a sample monthly raw data file that STR would
receive, containing data for multiple hotels:

In most cases, companies provide their own unique


hotel identification without a hotel name
A daily file would look the same except for the date field,
YYYYMMDD or 20100725
Fictitious data, of course

Data Error Checks


STR performs a large volume of comprehensive error
checks upon the raw data.
New data is compared to prior data for consistency.
There are Occupancy and ADR limits related to
geography and type of hotel. STR also tracks special
events that would cause unusual Occupancies and
ADRs.
Any exceptions are verified with the data provider
before the data is accepted.

STR Data Guidelines


STR uses a strict set of definitions based on the
Uniform System of Accounts for the Lodging Industry
Supply (Rooms Available) the number of rooms in a
hotel multiplied by the days in the month
Demand (Rooms Sold) number of rooms sold by a
hotel, does not include comp rooms or no-shows
Revenue total room revenue generated from the sale
of rooms, includes service charges not resort fees,
nothing else such as F&B
Uniform System of Accounts available from the AHLA or HFTP

Key Performance Indicators


From these raw data values, STR calculates the three hotel
industry key performance indicators (KPIs) :
Occupancy - %
Average Daily Rate (ADR) - $
Revenue per Available Room (RevPAR) - $
important metric, based upon all rooms, some
feel like it is better measurement of profitability

Occupancy
Definition
The percentage of available rooms that were sold during
a specific time period.
Calculation
Occupancy is calculated by dividing the demand (number
of rooms sold) by the supply (number of rooms
available). This is a percentage.
Occupancy = Demand / Supply

Monthly Occupancy - Formula


A

Supply Demand

D
Revenue

F
(Formula)

G
Occupancy
(%)

Jan-10

3100

2345

198765

C2 / B2 * 100

75.6

Feb-10

2800

2002

175432

C3 / B3 * 100

71.5

Mar-10

3100

1776

175012

C4 / B4 * 100

57.3

Apr-10

3000

2468

234567

C5 / B5 * 100

82.3

May-10

3100

2987

312345

C6 / B6 * 100

96.4

You could multiply times 100 or format as a percentage

ADR
Definition
A measure of the average rate paid for rooms sold during
a specific time period.
Calculation
ADR is calculated by dividing the room revenue by the
demand (rooms sold). This is a dollar amount.
ADR = Revenue / Demand

Monthly ADR - Formula


A
1

Supply

Demand

Revenue

(Formula)

ADR ($)

2 Jan-10

3100

2345

198765

D2 / C2

84.76

3 Feb-10

2800

2002

175432

D3 / C3

87.63

4 Mar-10

3100

1776

175012

D4 / C4

98.54

5 Apr-10

3000

2468

234567

D5 / C5

95.04

6 May-10

3100

2987

312345

D6 / C6

104.57

You could format as a $ or as a number with 2 decimals

RevPAR
Definition
A measure of the revenue that is generated by a property in
terms of each room available. This differs from ADR
because RevPAR is affected by the amount of unoccupied
rooms, while ADR only shows the average rate of rooms
actually sold.
Calculation
RevPAR is calculated by dividing the room revenue by the
total number of rooms available. This is a dollar amount.
RevPAR = Revenue / Supply

Monthly RevPAR Formula


A
1

Supply

Demand

Revenue

(Formula) RevPAR ($)

2 Jan-10

3100

2345

198765

D2 / B2

64.12

3 Feb-10

2800

2002

175432

D3 / B3

62.65

4 Mar-10

3100

1776

175012

D4 / B4

56.46

5 Apr-10

3000

2468

234567

D5 / B5

78.19

6 May-10

3100

2987

312345

D6 / B6

100.76

You could format as a $ or as a number with 2 decimals

Percent Changes
Definition
The comparison of This Year (TY) numbers vs. Last Year
(LY) numbers, whether a raw value or a KPI. The
percent change illustrates the amount of growth (up,
flat, or down) from the same period last year.
Calculation
The This Year number minus the Last Year number
divided by the Last Year number. This is a percentage.
Percent Change = (This Year Last Year) / Last Year
* 100
Remember the parentheses!

Demand Percent Change


A

This Year

Last Year

Demand

Demand

Percent Change
(Formula)

Demand

Jan-10

2345

2456

(B3-D3)/D3*100

-4.5

Feb-10

2002

2112

(B4-D4)/D4*100

-5.2

Mar-10

1776

1750

(B5-D5)/D5*100

1.5

Apr-10

2468

2345

(B6-D6)/D6*100

5.2

May-10

2987

2555

(B7-D7)/D7*100

16.9

You could multiply times 100 or format as a percentage

Hint - % Changes for Raw Values


The Percent Changes for raw values such as Supply,
Demand, and Revenue are valuable bits of information
Supply Percent Change shows whether there are more
or less rooms this year versus last year
Demand Percent Change shows whether there are
more or less rooms sold (guests spending the night)
this year versus last year
Revenue Percent Change shows whether there is
more or less money being made by the hotel or hotels
(and therefore being spent by those guests)

ADR Percent Change


A

2010

2009

ADR

ADR

Percent Change
(Formula)

ADR

Jan-10

84.76

81.93

(B3-D3)/D3*100

3.4

Feb-10

87.63

88.85

(B4-D4)/D4*100

-1.4

Mar-10

98.54

100.07

(B5-D5)/D5*100

-1.5

Apr-10

95.04

95.24

(B6-D6)/D6*100

-0.2

May-10

104.57

116.93

(B7-D7)/D7*100

-10.6

You could multiply times 100 or format as a percentage

Hint - % Changes for KPIs


Occupancy Percent Change shows whether the
Occupancy this year is greater or less rooms than the
Occupancy last year. This could be related to Supply
and Demand changes.
ADR Percent Change shows whether the average rate
this year is greater or less than the average rate last
year.
RevPAR Percent Change shows whether the RevPAR
amount is greater or less than the amount last year.
This could be related to Occupancy and ADR
differences.

Daily vs. Monthly Data


The formulas for daily KPIs and Percent Changes are
the same as for monthly
The date fields are different:
201007 monthly
20100725 daily
Most daily percent changes are based upon
comparable days, in other words the same day of
week with the closest date
Thu 20100715 is compared to Thu 20090716
Sat 20100731 is compared to Sat 20090801

Multiple Time Periods


Multiple time periods for monthly data include:
Year-to-Date (YTD)
Running 12-Month (12-Month Moving Avg)
Running 3-Month
Multiple time periods for daily data include:
Current Week
Month-to-Date (YTD)
Running 28-Day (different than Running 4-wk)
The metrics for all of these time periods are based upon
the aggregated raw data

YTD Supply, Demand, & Revenue


A
1

Supply

Demand

Revenue

Jan-10

3100

2345

198765

Feb-10

2800

2002

175432

Mar-10

3100

1776

175012

Apr-10

3000

2468

234567

May-10

3100

2987

312345

(Formula)

May YTD

sum(B2:B6)
15100

sum(C2:C6)

sum(D2:D6)

11578

You can use the SUM function to aggregate the raw values

1096121

YTD Occupancy, ADR, & RevPAR


A
1

Supply Demand

Revenue

Occupancy

Jan-10

3100

2345

198765

Feb-10

2800

2002

175432

Mar-10

3100

1776

175012

Apr-10

3000

2468

234567

May-10

3100

2987

312345

YTD

15100

11578

1096121

8 (Formula)

76.7

ADR RevPAR

94.67

C7/B7*100 D7/C7

Aggregate raw values, then apply same formulas as before

72.59
D7/B7

Other Multiple Time Periods


The Raw data for other monthly and daily time periods are
calculated the same way by aggregating the raw data for
every month or day in the entire time period
The KPIs (calculated metrics of Occupancy, ADR, and
RevPAR) for multiple time periods are always calculated
from the aggregated raw data
Numbers for multiple time periods never use averages of
monthly or daily values. (Some people mistakenly
compute YTD occupancy by adding the occupancy of
each month and dividing by the number of months.)
Aggregating accounts for different days in different months

Hint Multiple Time Periods


Current Month numbers show the performance for a
single month and YTD numbers show how
performance is unfolding for the current year.
Running 3-Month numbers show a little more of a
performance trend instead of just the Current Month
number.
Running 12-Month numbers show a longer
performance trend. These numbers can be helpful at
the beginning of the year when the YTD number only
includes a small number of months. Running 12Month numbers also remove seasonality effects.

Percent Changes for Multiple


Time Periods
The percent changes for multiple time periods are
based on the aggregated values or the calculated
metrics (which are derived from the aggregated
values) for this year compared to the same values for
last year
Percent changes for daily data are based upon groups
of comparable days, with the exception of Month-toDate numbers which are based on a date-to-date
comparison

YTD Percent Changes


A

This Year

Supply

DemOccuand Revenue pancy

Jan-10

3100

2345

198765

3100

2456

201234

Feb-10

2800

2002

175432

2800

2112

187654

Mar-10

3100

1776

175012

3100

1750

175123

Apr-10

3000

2468

234567

3000

2345

223344

May-10

3100

2987

312345

3100

2555

298765

YTD

94.67 72.59 15100 11218 1086120

Percent Changes

OccuRevRevenue pancy ADR PAR

76.7

ADR

Rev- Sup- DemPAR ply


and

Date

8 (Formula)

Last Year

15100 11578 1096121

74.3 96.82 71.93

Occupancy

ADR

3.2

RevPAR

-2.2

0.9

(E7-K7)/K7*100 (F7-L7)/F7*100 (G7-M7)/G7*100

Aggregate 1st, KPI formulas 2nd, % Change formulas 3rd

Full Availability Subject Hotel


Occasionally a subject hotel may report a Supply
number that is different than the number of rooms in the
property times the days in the period
If this happens in the case of the subject hotel, their
STAR report will always reflect the Supply and the
corresponding Occupancy based upon the number the
hotel actually reported.
STR does not change the Supply number of the subject
hotel on their own STAR report

Full Availability is an advanced concept

Full Availability Example - Subject


A

Report# Actual
ed
Date Rms Supply Supply Demand Revenue

Formula

Occupancy

2 Jan-10 100

3100

3100

2345

198765 D2 / E2 * 100

75.6

3 Feb-10 100

2800

2744

2002

175432 D3 / E3 * 100

73.0

4 Mar-10 100

3100

2945

1776

175012 D4 / E4 * 100

60.3

5 Apr-10 100

3000

2700

2468

234567 D5 / E5 * 100

91.4

6 May-10 100

3100

3100

2987

312345 D6 / E6 * 100

96.4

Occupancy for Subject based on reported Supply, not Actual

Weekday/Weekend and Day of Week


Data vs. Monthly Data
Sometimes a hotel will submit daily data that does not add
up exactly to the monthly number
There are good reasons for this; some systems do not
accept adjustments to daily data, only to the month
numbers
STR will slightly adjust the daily numbers based upon the
monthly data when they are aggregated to generate day
of week and weekday/weekend numbers

Use percentages for each day, ensures WD/WE adds up

Percent Changes and WD/WE or


Day of Week Data
Weekday/Weekend (WD/WE) Percent Changes
compare all the aggregated weekday or weekend data
(per month or other time period) this year to the same
data last year
Day of Week (DOW) Percent Changes compare all the
aggregated daily data for a single day (per month or
other time period) this year to the same data last year

Running 4 Week Data


The Weekly Reports compare individual daily data for
the Current Week to the Running 4 Week numbers
The Running 4 Week numbers are the aggregated data
for a single day for the last 4 weeks, i.e.: the last 4
Mondays
A hotel can compare their Monday performance metrics
to the average of the last 4 Mondays to see if they are
doing better or worse on a single day of the week

Questions
Briefly describe how STR obtains raw property data
Identify the various metrics used by the hotel industry
Explain how metrics are calculated when it comes to
multiple time periods
Compare the differences between how monthly and
daily data is treated
Use Excel and sample raw data to demonstrate the
formulas used to calculate the various numbers

Competitive Set Data

Key Performance Indicators


for the Competitive Set
Numbers for the comp set are derived based on
aggregated raw data for each separate hotel
Supply, Demand, and Revenue numbers are the
combined values of each hotel in the comp set
Occupancy, ADR, and RevPAR numbers are based
upon the aggregated Supply, Demand, and Revenue

Including or Excluding the Subject


Hotel in the Competitive Set
STR allows companies to choose whether to include or
exclude the data for the subject hotel in the numbers for
the comp set
Historically companies usually included the data for the
subject hotel, but more recently most companies have
decide to exclude the subject
Some people feel that having the subject data included in
the comp set numbers distorts or dilutes the comp set

Comp Set Supply, Demand, & Revenue


A

Supply

Demand

Revenue

Property

Date

11111

May-10

3100

2222

187654

22222

May-10

3255

2468

198765

33333

May-10

2945

2345

223344

44444

May-10

2790

1987

165432

5555

May-10

3410

3210

298765

Comp Set

May-10

15500

12232

1073960

(Formula)

sum(C2:C6)

sum(D2:D6)

sum(E2:E6)

Aggregate raw values for each member of the comp set

Comp Set Occupancy, ADR, & RevPAR


A
1

Property

B
Date

Supply

Demand

Revenue

Occupancy

11111 May-10

3100

2222

187654

22222 May-10

3255

2468

198765

33333 May-10

2945

2345

223344

44444 May-10

2790

1987

165432

5555 May-10

3410

3210

298765

Comp Set May-10

15500

12232

1073960

(Formula)

ADR RevPAR

78.9 87.80

69.29

D7/C7*100 E7/D7 E7/C7

Apply KPI formulas to aggregated comp set data

Percent Change Numbers


for the Competitive Set
Percent Change numbers for the comp set are
calculated similarly to the ones for the subject property
(This Year Last Year) / Last Year * 100
These numbers show increases or decreases in
performance this year versus last year

Comp Set Occupancy, ADR, & RevPAR


Percent Changes
A

This Year
OccuDate pancy ADR

Last Year

Rev- OccuPAR pancy

3 Comp Set May-10 78.9 87.80 69.29

4 (Formula)

82.6

ADR

Percent Changes
RevPAR

93.86 77.50

Occupancy

-4.4

ADR

RevPAR

-6.5

-10.6

(C7-F7)/F7*100 (D7-G7)/G7*100 (E7-H7)/H7*100

Calculate TY & LY KPIs, then apply % Change formulas

Index Numbers
The Index numbers compare the performance of the
subject property to the comp set
Subject Value / Comp Set Value * 100
A number greater than 100 means the subject property
outperformed the comp set and a number below 100
means the comp set outperformed the subject property
Index numbers are available for Occupancy, ADR,
RevPAR and the Percent Changes

Index numbers are percentages, multiple * 100 or format as %

Importance of Index Numbers


Index numbers tend to be relied upon heavily by the
industry to evaluate the performance of hotels
Occupancy, ADR, and RevPAR Index numbers show the
current performance of the subject hotel compared to the
comp set
The index percent change numbers for these same KPIs
show if the subject hotel is improving compared to the
comp set
The headquarters of many companies receive corporate
index reports listing each hotel with their index numbers

Some companies relate managers bonuses to index numbers

Occupancy, ADR, & RevPAR Indexes


A

Subject Property
1
2 May-10
3 (Formula)

Occupancy ADR

Comp Set

I
Index Numbers

Rev- OccuRevPAR pancy ADR PAR Occupancy

96.4 104.57 100.76

78.9 87.80 69.29

122.1

ADR
119.1

RevPAR
145.4

B2/E2*100 C2/F2*100 D2/G2*100

Calc KPIs for Subject & Comp, then apply Index formula

Index Percent Change Numbers


First you calculate the Index numbers this year for
Occupancy, ADR, and RevPAR
Next you calculate the Index numbers for last year using
the same formulas
Then you can calculate the Percent Changes for the Index
numbers, this shows whether the Subject is improving
Indexes could be below 100 TY, but if Percent Changes
are positive, Subject is improving

Index of 90 TY and 80 LY yields an Index % Chg of 12.5%

Occupancy, ADR, & RevPAR Index


Percent Changes
A

Index Numbers

This Year

Date

May-10

5 (Formula)

Last Year

Percent Change

OccuOccupancy ADR RevPAR pancy ADR RevPAR Occupancy


122.1 119.1

145.4

99.8 124.6

124.4

22.3
(B2-E2)/E2
*100

ADR

RevPAR
-4.4

(C2-F2)/F2
*100

Calc indexes TY & LY, then apply % Change formulas

16.9
(D2-G2)/G2
*100

Hint - Index Percent Changes


Here is a hypothetical situation - a subject hotel has
Occupancy, ADR, and RevPAR indexes that are all below
100. The General Manager gets a call from the Regional
Manager who says, great job. Why?
The Regional Manager may be looking at index percent
change numbers that are all strongly positive. So the
subject hotel is under performing the comp set, but the
subject hotel is catching up (improving more than the
comp set average).
The opposite scenario could also be true.

Ranking Data What is it?


STAR Property Reports include Ranking information for
Occupancy, ADR, RevPAR and each Percent Change,
comparing the subject hotel to the comp set
The Ranking data would be in the format of X of Y,
where X is the subject hotels position and Y is the
number of participating properties in the comp set
For example 2 of 7 would mean the subject hotel had
the 2nd best value in the comp set of 7

Ranking data gives you more than just the KPIs & Indexes

Occupancy Ranking Data How?


The values for each hotel in the comp set including the
subject hotel are sorted
Then the position of the subject hotel is determined
within the group
Here are sample values of the subject and the comp set

STR#
Value
Rank

1234
87
1 of 6

2345
85
2 of 6

3456
83
3 of 6

4567
(Subject)
82
4 of 6

5678
78
5 of 6

Subject had the 4th highest occupancy in the comp set of 6

6789
75
6 of 6

ADR Ranking Data Ties


Just in case two or more hotels are tied when it comes
to a specific value, i.e.: they have the same exact
number, then each hotel would get the same number
All hotels below with a $95 ADR get a rank of 2 of 6:

STR#
Value
Rank

1234
$97
1 of 6

2345
$95
2 of 6

3456
$95
2 of 6

4567
(Subject)
$95
2 of 6

5678
$92
5 of 6

Subject had the 2nd highest ADR (with 2 others) in comp set

6789
$88
6 of 6

Multiple Time Periods and Comp


Set Data
Multiple time periods are handled the same way for a
comp set as they are handled for a subject property
The Raw data for monthly and daily time periods are
always aggregated and then the calculations are
applied to the aggregated data

Sufficiency of Comp Set Data


If a Comp Set has 3 or more participating hotels
(submitting actual data) other than the subject, then that
comp set is defined as Sufficient. The numbers for the
comp set can then appear on the STAR report
Percent change numbers will appear if the comp set had
sufficient data this year and last year
Multi-year numbers are considered to be sufficient if
greater than 50% of the months or day included in the
multi-year period are sufficient

Non-Reporting Hotels in the


Comp Set
There may be situations where one or more hotels in a
comp set does not report data for a month or more
First, the Supply, Demand, and Revenue for the
participating properties is aggregated. This is the
Sample Supply, Demand, and Revenue.
Next, an Occupancy and ADR is calculated based on
the Sample data

Non-Reporting Hotels in the Comp


Set - continued
Then the Supply is determined for all hotels in the comp
set, simply the number of rooms times the days in the
month. This is referred to as the Census Supply.
This Supply number is multiplied times the Sample
Occupancy to derive the Census Demand
The Census Demand is multiplied times the Sample
ADR to derive the Census Revenue

Non-Reporting Hotel Example


A
1

Property

Date

Supply
# Rms (Actual)

E
Demand

Revenue

Occupancy

ADR

11111

May-10

100

3100

2222

187654

22222

May-10

105

3255

2468

198765

33333

May-10

95

2945

2345

223344

44444

May-10

90

5555

May-10

110

3410

3210

298765

Comp Set
Sample #s

410

12710

10245

908528

Comp Set
Census #s

500

15500

12494

1107961

(Formula)

C7 * 31

D8 * G7 /
100

E8 * H7

Calc Occ & ADR based on Sample, multiply * Total Supply

80.6

88.68

Consistent Sample related to


Comp Set data
If a subject hotel has a non-reporting property (or a
property that reports intermittently) in its comp set, that
can possibly distort the comp set numbers. Or hotels
that participate this year but not last year, or visa versa.
You never know if a change in performance is related to
what is actually happening with the comp set hotels or
the fact that a single hotels data is missing
There are ways for a subject hotel to remove a nonreporting property from its comp set
(Participation information for the comp set is displayed
on the Response page of the STAR Report)

Full Availability and Comp Sets


Occasionally a hotel in the comp set may report a
Supply number that is different than the number of
rooms in the property times the days in the period
In those cases, STR uses the Supply number based
upon full availability, not the number that the hotel
reports

Advanced concept

Full Availability Example


A
1

PropertyDate

H
I
Occu- OccuActual Reported
pancy pancy
# Rms Supply Supply Demand Revenue (Full) (Report)

11111 May-10 100

3100

3100

2222

187654

22222 May-10 105

3255

3340

2468

198765

33333 May-10

95

2945

2900

2345

223344

44444 May-10

90

2790

2199

1987

165432

5555 May-10 110

3410

3410

3210

298765

15500

(14949)

6
7

Comp Set May-10

8 (Formula)

sum
(D2:D6)

12232 1073960
sum
(F2:F6)

sum
(G2:G6)

78.9
D7/F7
*100

Formulas are based upon Actual Supply, not Reported

(81.8)

Questions
Demonstrate how KPIs and percent changes are
calculated when it comes to comp set data
Demonstrate how indexes and ranking data are
calculated comparing the subject to the comp set
Explain the significance of indexes to the hotel industry
Explain the effect of non-reporting hotels in a comp set
When will different types of comp set data not appear
on a STAR report?

Industry Data

Industry Data Basics


STR uses a variety of segments to analyze performance
of the hotel industry
There are geographic (market, tract) and non-geographic
(scale, location) categorizations
STAR Reports and corporate data files will frequently
compare a subject hotel to nearby industry segments
Publications and Destination Reports will also display the
performance of industry segments

The Methodology for US Industry


Data versus Comp Set Data
The methodology used for arriving at US industry
numbers is different than the one for arriving at comp set
numbers
Actual data is used for hotels that participate and
modeled data is used for hotels that do not participate.
(This is why STR includes non-participants in their
Census database of hotels.)
The Actual and Modeled data are aggregated for all
hotels in each industry segment in order to arrive at
performance numbers

Modeling of US Industry Data


STR estimates the data of non-participating hotels to
help increase the accuracy of industry data
Data for a non-participant is estimated based on
participating hotels that are closest to the nonparticipant based on geography and price level
No modeled data is ever used in the Comp Set numbers
STR uses a different method for non-US industry
numbers

Possible to explain technical procedure used for modeling

Key Performance Indicators


for Industry Segments
The Actual and Modeled data are aggregated for all
hotels in each industry segment (market, tract, )
Supply, Demand, and Revenue numbers are the
combined values of each hotel in the industry segment
The Key Performance Indicators (Occupancy, ADR, and
RevPAR) are based upon the aggregated Supply,
Demand, and Revenue numbers

Industry Supply, Demand, & Revenue


1

Property

Date

# Rms Type of Data

Supply

Demand

Revenue

11110

May-10

100

Actual

3100

2222

187654

22220

May-10

105

Actual

3255

2468

198765

33330

May-10

95

Modeled

2945

2345

223344

44440

May-10

90

Actual

2790

2456

234567

5550

May-10

110

Modeled

3410

3210

298765

6660

May-10

85

Actual

2635

2511

201234

7770

May-10

115

Actual

3565

3012

312345

21700

18224

1656674

Tract Scale

10 (Formula)

700

sum
(E2:E8)

sum
(F2:F8)

Accumulate Actual & Modeled Supply, Demand, & Revenue

sum
(G2:G8)

Industry Occupancy, ADR, & RevPAR


A
1

Property

B
Date

11110 May-10

100

Actual

3100

2222

187654

22220 May-10

105

Actual

3255

2468

198765

33330 May-10

95 Modeled

2945

2345

223344

44440 May-10

90

Actual

2790

2456

234567

5550 May-10

110 Modeled

3410

3210

298765

6660 May-10

85

Actual

2635

2511 201234

7770 May-10

115

Actual

3565

3012

10 (Formula)

#
Type of
OccuRms Data
Supply Demand Revenue pancy ADR

Tract
9 Scale

700

21700

J
RevPAR

312345

18224 1656674 84.0

90.91 76.34

F9/E9
*100 G9/F9 G9/E9

Apply KPI formulas to the accumulated raw data

Percent Change Numbers


for Industry Segments
Percent Change numbers for industry segments are
calculated exactly like the ones for the comp set or the
subject property
(This Year Last Year) / Last Year * 100
These numbers show increases or decreases in
performance this year versus last year

Multiple Time Periods and


Industry Data
Multiple time periods are handled exactly the same for
an industry as for a comp set or a subject property
The Raw data for the monthly and daily time periods are
always aggregated and then calculations are derived
based upon the aggregated data

Supply Numbers Over Time


The number of rooms available for an industry segment or
any group of hotels, including a comp set, can vary over
time due to:
- New hotels opening
- Hotels closing
- Room additions
- Room drops
New Supply=Orig Supply+(Opens+Adds)(Closes+Drops)
The number of rooms available for segments such as
scale, class, or brand can vary over time due to:
- Conversions in
- Conversions out
New=Orig+(Opens+Adds+CvIns)(Closes+Drops+CvOuts)

Seasonally Closed Hotels


Some hotels close for one or more months out of a year
In the US, there are 1,460 seasonally closed hotels
Many are in resorts areas such as beach or ski/mountain
locations
Most are closed during some of the winter months,
although a few are closed during the summer
Supply numbers for industry segments will also be
affected by seasonally closed hotels

Sufficiency of Industry Data


If an Industry segment has 4 or more hotels that submit
actual data, then that segment is defined as Sufficient,
similar to the comp set rule (3 required)
The numbers for that industry segment can then appear
on STAR reports and elsewhere. Industry data will not
appear when the segment is insufficient.
Multi-year numbers are considered to be sufficient if
greater than 50% of the months or day included in the
multi-year period are sufficient

Consistent Sample related to


Industry Segment data
If an industry segment has a non-reporting property (or
a property that reports intermittently), that can possibly
distort the performance numbers. Or a hotel that
participates this year and not last year, or visa versa. Or
hotels that open or close during the date range you are
looking at.
You never know if a change in performance is related to
what is actually happening among the hotels in the
industry segment or the fact that a single propertys data
is missing
(You can run a Trend report on a specific group of reporting
hotels to analyze performance on a consistent sample.)

Leap Year Methodology


The STR methodology for Leap Year assumes that
February 29th never exists.
If this methodology was not used, there would be an
increase in Supply, Demand, and Revenue in Februarys
during leap years.
All raw February monthly data (property, comp set, and
industry) for leap years is multiplied times 28/29 as if this
month only had 28 days.

Full Availability
Occasionally a hotel in the industry segment may report
a Supply number that is different than the number of
rooms in the property times the days in the period
When calculating industry data, STR always uses the
Supply number based upon full availability, not the
number that the hotel reports

Advanced concept

Questions
Define an industry segment
Demonstrate how KPIs and percent changes are
calculated when it comes to industry segments
Briefly explain how US industry data is modeled
When will different types of industry data not appear on
a STAR report?

Corporate Data

What is meant by Corporate Data?


Individual hotels receive STAR reports with data for their
subject property compared to their comp set and relevant
industry segments
The regional managers and the staff at corporate
headquarters of these hotels are also very interested in
this data
Most hotel companies receive volumes of corporate data.
These could be chains, management companies, and
ownership groups.

What do Companies Receive?


Most corporate headquarters receive reports listing each
of their hotels and the various performance metrics,
referred to as Index Reports. These reports may be
subtotaled by various fields (region, brand, operation)
Some companies receive Summary Reports
aggregating data for their hotels based upon various
subtotal groups.
In addition to reports, companies also receive data files,
so they can analyze this data and merge it with internal
information

Who do Companies Compare Their


Hotels to?
Most commonly, companies compare their hotels to the
corresponding comp sets
Sometimes they compare their hotels to the corresponding
industry segment of the subject property, such as a Market
or Tract Scale
They may compare total Brand numbers to the
corresponding Scale total, or to a group of other brands,
referred to as a Corporate Comp Set

Corporate Aggregations
Hotels can be grouped based upon common fields such
as Brand, Region, or Operation (Corporate versus
Franchise)
Hotels can also be grouped based upon user-defined
variables, such as Sales Territories, Regional Managers,
or Hotel Types
The raw hotel and comp set data can be aggregated
using various methods, i.e.: Standard Weighting or
Portfolio Weighting

International Issues

US versus WW Industry Segments


In the US and in North America, probably the most
popular industry segment to compare hotels to are Market
Scale or Tract Scale
The Scale category is totally related to chain hotels
Outside North America, since there are much less chain
hotels, Class is used instead and the popular segments
are Market Class and Tract Class

Non-Reporting Hotels and Industry


Data
The US is the only country where property data is
modeled for non-reporting hotels. The numbers for
Industry segments in the US are based on a combination
of Actual and Modeled data.
Outside the US, the numbers for Industry segments are
solely based on Actual data of participating hotels. The
methodology used to derive metrics for industry segments
is exactly the same as for competitive sets. The
Occupancy & ADR of participating hotels are used to
estimate non-participating hotels.

WW Participation Issues
In some areas of the world, STR participation is still
growing and the number of hotels submitting data may be
smaller
When requesting data back in time, you need to check
past participation
There may be enough hotels to pass sufficiency tests for
recent months, but not back in time
Also keep participation in mind when you are looking at
year-over-year change to be sure it is not affected by new
hotels starting to submit data

Currencies and Exchange Rates


Outside the US, most hotels want to see their STAR
reports in their local currency
STR obtains daily and monthly exchange rates for all
currencies in the world (at least the countries that have
hotels) from Oanda (www.oanda.com)
Daily data is converted using the daily exchange rate
Monthly data is converted using the daily exchange rate
for the last day of the month

Exchange Rates and Multiple time periods


It is important to understand how exchange rates are
handled when it comes to multiple time periods for
monthly data, i.e.: YTD and Running 3 or 12 month
numbers
Raw data is aggregated using the exchange rate for each
individual month and then the KPIs are derived. This
methodology accounts for changing exchange rates.
Multiple time periods for daily data, i.e.: weekly or
Running 28-day numbers are calculated the same way,
using the exchange rate for each individual day

Currencies and Corporate Data


When companies obtain data from STR, they may
request the numbers in multiple currencies, i.e. US
Dollars, Euros, and Local.
Analyzing the performance of hotels in a company
spread over multiple countries can sometimes be
distorted by fluctuating exchange rates.
STR produces some data and reports for companies in a
constant currency. This methodology applies a single
exchange rate i.e.: the rate from January of the current
year to the numbers for every month.

Additional Data

Additional Issues/Topics
Segmentation Data (Group, Transient, Contract)
Additional Revenue Data (F&B, Other, Total)
Data within a Trend Report
Data within a Hotel Review or Destination Report
HOST Data

Questions?
Steve Hood
steve@str.com
615-824-8664, extension 3315
www.strglobal.com