Smith Travel Research - History• 1985 - founded, started collecting hotel data• 1987 - started collecting monthly STAR data• 1992 - started collecting Canada, Mexico, Caribbean data• 1997 - started collecting Weekday/Weekend data• 1998 - launched WWSTAR (worldwide)• 1999 - launched DaySTAR (daily data)• 2000 - launched eSTAR (electronic distribution)• 2001 - launched DaySTAR Plus (Segmentation & Additional Revenue)• 2003 - launched Pipeline (Lodging Supply)
STAR ParticipationUS Census Database• Nearly 49,000 properties (also non-participants)• Hotels with 20 rooms or more (no B&B, Timeshares)• Historical data (opens/closes, conversions, adds/drops)• Continually updatedMonthly STAR Data Submission• Over 23,000 properties and 3 million rooms• Nearly 65% of all US rooms report• All major chains• Nearly 2,000 independents through INDV program
WW STAR Participation• WW Census database of nearly 35,000 properties• Nearly 7,000 properties participating throughout the world• Over 1,000 properties in Canada
COMP SETA group of four or morehotels, selected by the hotelmanagement, to benchmark thesubject property’s performance.
Competitive Set RulesFor Creating Comp Sets• Minimum of four reporting hotels• Single hotel or chain no more than 35% rooms• Single company no more than 60% rooms (parent company who owns multiple brands)For Changing Comp Sets• Changes made in pairs (add or drop2, add 1 and drop 1)• Can add single new hotel within six months• Can drop non-reporting hotel
EXAMPLE:Hotel Rex’s Comp Set• Warwick Regis Hotel – 74 rooms• Hotel Diva – 115 rooms• Kensington Park Hotel – 92 rooms• Hotel Triton – 140 rooms• Orchard Hotel – 104 rooms• Galleria Park Hotel – 177 rooms• Hotel Rex – 94 rooms
Comp Sets – Include/ExcludeSome chains choose to exclude yourproperty from the comp set when it comesto reporting– Advantage – property does not dilute comp set– Disadvantage – share numbers are not 100% true without property in comp set
Comp Set Changes• Must come through corporate• From company with comp set control
Comp Sets and Confidentiality• Rules are strictly enforced• Comp set changes are carefully monitored• Check other/past comp sets, other reports• Eliminate ability to isolate single property
STAR Data LoadingHow• Most data received via corporate feeds• Data for independents entered via STR webWhen• Monthly data starts arriving after month end• Daily data for prior week arrives on Monday or Tuesday except for holidays
Why do I need a STAR Report?• Track your performance vs. competition• Aids in the strategic pricing decisions• Help improve profitability• View Supply/Demand/Revenue changes
Benchmarking: My Property vs. My Comp Set 20% 20% 15% 10% 7% 10%YOY Change YOY Change 0% 0% -3% -10% -10% -10% -20% -20% Manager A Manager B As Competitors Bs Competitors WHO IS THE BETTER PERFORMER BETWEEN THE TWO MANAGERS?
DEFINITIONS• Supply = rooms available during time period• Demand = rooms sold, excluding comp rooms• Revenue = room revenue only• Occupancy = demand divided by supply (* 100)• ADR = average daily rate, revenue divided demand• RevPAR = revenue per available rooms, revenue divided by supply
MARKET SHAREMarket Share is the number of rooms in your hotel as a percentage of the rooms in your hotel’scompetitive market set.STR# Name City, State Zip Phone Rooms Open Date19657 Hotel Rex San Francisco, CA 94102-1102 (415) 433-4434 94 19070619631 Hotel Triton San Francisco, CA 94108-3607 (415) 394-0500 140 19200619638 Galleria Park Hotel San Francisco, CA 94104-4595 (415) 781-3060 177 19110619648 Kensington Park Hotel San Francisco, CA 94102-1592 (415) 788-6400 92 19230621450 Hotel Diva San Francisco, CA 94102-1223 (415) 885-0200 115 19120625368 Warwick Regis Hotel San Francisco, CA 94102-1223 (415) 928-7900 74 19880641618 Orchard Hotel San Francisco, CA 94108 (415) 362-8878 104 200011 796 Hotel Rex = 94 rooms Total rooms in comp set = 796 To calculate hotel’s market share: Market share = total rooms available ____________________ total rooms in market set Market share = 94/796 = 11.8%
MARKET SETSTR# Name City, State Zip Phone Rooms Open Date19657 Hotel Rex San Francisco, CA 94102-1102 (415) 433-4434 94 19070619631 Hotel Triton San Francisco, CA 94108-3607 (415) 394-0500 140 19200619638 Galleria Park Hotel San Francisco, CA 94104-4595 (415) 781-3060 177 19110619648 Kensington Park Hotel San Francisco, CA 94102-1592 (415) 788-6400 92 19230621450 Hotel Diva San Francisco, CA 94102-1223 (415) 885-0200 115 19120625368 Warwick Regis Hotel San Francisco, CA 94102-1223 (415) 928-7900 74 19880641618 Orchard Hotel San Francisco, CA 94108 (415) 362-8878 104 200011 796 MARKET SET Hotel Rex Hotel Triton Galleria Park Hotel Kensington Park Hotel Hotel Diva Warwick Regis Hotel Orchard Hotel
MARKET SHARE IS YOUR PIECE OF THE PIE If the Hotel Rex achieves 11.8% of the total room nights generated within its market set in a given month, our actual share equals our Market/Fair Share, giving the Hotel Rex an Occupancy index of 100 percent. Hotel Rex Hotel Triton Galleria Park Hotel Kensington Park Hotel Hotel Diva Warwick Regis Hotel Orchard Hotel
MARKET PENETRATION INDEXMarket Penetration or Occupancy Index is the percentage of demand for rooms actually accruing to our hotel. It is calculated as the ratio between theTotal Rooms Occupied in our hotel against the Total Rooms Occupied collectively attributed to our hotel’s market set.
Hotel Rex in March 1. 73.1% - average market occupancy 2. 78.6% - Hotel RexStep One:Total market set of rooms = 796Market Occupancy = 73.1%31 days in MarchTotal rooms available = 796 rooms x 31 days = 24,676 total rooms availableTotal rooms occupied of the market set = 24,676 x .731 = 18,038 (DEMAND)Rex Hotel’s market share = 11.8%Step Two:Our goal of rooms occupied should be = 2,128 (18,038 x .118)Hotel Rex’s total rooms available in March = 94 X 31 = 29142914 total rooms available x .786 occupancy = 2,290We had a total of 2,290 rooms occupiedTotal rooms occupied / market share = occupancy index 2,290 / 2128 = 1.07 or 107% occupancy index
Exercise #1FebruaryGiven:Hotel Rex’s Occupancy = 64.1%Comp Set’s Occupancy = 68.4%28 Days in FebruaryTotal comp set rooms = 796Rex Hotel’s market share = 11.8%Calculate the penetration index for the month of February.Calculation:Total rooms available in Feb = 796 x 28 = 22,28822,288 x .684 = 15,245 rooms (DEMAND)Hotel Rex’s Goal = 15,245 x .118 = 1,799 rooms (100% index)94 rooms x 28 days = 2632 (Rex’s total rooms available)2632 x .641 = 1,687 (Rex’s total rooms occupied)1687 / 1799 = 93.7% penetration index
Possible Reasons…• Location, fixed – no solution, signage may help• Wrong management company• Wrong management team• Lack of marketing dollars to reach that primary market• Lack of management sales effforts• Lack of sales tools• Old décor• Wrong amenity mix• Unfortunate reputation• The list can go on…
Definitions• Percent Change = (TY value – LY value) / LY value (* 100)• Occupancy Index = hotel occupancy / comp set occupancy (* 100), also called penetration index• ADR Index = hotel ADR / comp set ADR (* 100)• RevPAR Index = hotel RevPAR / comp set RevPAR (* 100), also called yield index• Share or Market Share = property’s percent of total• Rank = property’s standing among comp set, “2 of 7” means 2nd highest in comp set of 7 properties
INDEX BALANCEIndex balance means you played themarket perfectly, capturing volume whennecessary and rate when possible. Bydoing this, your occupancy and rateindexes were rewarded mutually.
What’s an Ideal Balance? Occupancy and rate indexes should remain within 10 points of one another if the hotel is optimally managing the demand in the marketplace.
REV PAR INDEX An RevPAR index is designed to measure a propertys fair share of Segments(comp set, market, tract, etc.) Revenue Per Available Room (RevPAR). RevPAR/Segment RevPAR x 100 = RevPAR IndexIn most hotels, one of our benchmark measurements is Achieving Rev PAR Index Goal.