Module Two Part 2 Competitive Set Data Hotel

Module Two Part 2 – Competitive Set Data Hotel Math Fundamentals: The Metrics used by the Hotel Industry

KPIs for the Competitive Set Exam Worthy! § Are derived based upon the aggregated raw data for each separate hotel that is a member of the comp set. § First step to calculate KPIs for the COMP SET is to combine the Supply, Demand, and Revenue values for each hotel in the comp set. § Then the Standard Occupancy, ADR, and Rev. PAR formulas are applied to the aggregated Supply, Demand, and Revenue numbers.

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. This decision is made at the company level, not the hotel level. All companies exclude when it comes to daily data. § More recently most companies have decided to exclude the subject hotel as 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

Comp Set Occupancy, ADR & Rev. PAR Exam Worthy!

Comp Set Occ. , ADR & Rev. PAR % Changes Exam Worthy!

Comparing Subject Hotel vs. the Comp Set § Subject Hotels compare the actual values for the Occupancy, ADR, and Rev. PAR of themselves to the Comp Set. § Subject Hotels will be able to determine if they have a higher or lower value for each KPI compared to the average of all the members of the Comp Set. § Subject Hotels can also compare their % changes to the % changes of the Comp Set to see if their hotel is improving more or less than the Comp Set.

Comparing Negative Percent Changes § There are instances where numbers for the Comp Set and the Subject Hotel could both be negative, i. e. both doing worse than last year. § In that case the lower negative numbers actually has the best Percent Change. So even though you are doing worse than last year, you are still doing better than the Comp Set.

Index Numbers § The Index numbers compare the performance of the subject property to the comp set. Subject Value ÷ Comp Set Value * 100 § Greater than 100 means the subject property outperformed the comp set § Below 100 means the comp set outperformed the subject property. § Index numbers are available for Occupancy, ADR, and Rev. PAR.

Occupancy, ADR, & Rev. PAR Indexes

Monthly Indexes

Occupancy, ADR, & Rev. PAR Index % Changes Exam Worthy!

Index Numbers % Change Real World Worthy! § The Index Percent Change numbers are very important because they show year-over-year “improvement”. § Example: You are a General Manager and your hotel has Occupancy, ADR, and Rev. PAR indexes that are all below 100. You get a call from your Regional Manager who says, “great job”. Why? § The Regional Manager is looking at index percent change numbers that are all strongly positive. Your hotel is underperforming the comp set, but your hotel is catching up (improving more than the comp set average). That is the reason for the positive feedback.

Ranking Data § Ranking data is displayed in the format: “X of Y”, where X is the subject hotel’s position and Y is the number of participating properties in the comp set which includes the subject hotel. § For example “ 2 of 6” would mean the subject hotel had the 2 nd best value in the comp set of 6 members. § STAR Property Reports include Ranking information for Occupancy, ADR, Rev. PAR and each Percent Change.

Bandwidth Data § Bandwidth data actually provides more information than Ranking data. § Bandwidth reports show the daily Occupancy, ADR and Rev. PAR of the Subject hotel compared to the range of values for the comp set hotels. For example if the ADR “band” is broad, there is a wide range of values among the comp set. If the band is small, the range is narrow. § The Bandwidth information will provide an approximation of the high and low values of each metric on a daily basis.

Bandwidth Analysis: January 2012

Sufficiency of Comp Set Data § For comp set data for a single month or day, there must be at least 3 or more hotels in the comp set that submit data for the comp set data to be “sufficient”. § Sufficiency does not take into consideration the number of hotels that are actually in the comp set. You could have 10 hotels in the comp set, but if only 3 submit data for a month, the data for that month would be “sufficient”. Exam Worthy!

Missing Comp Set Data and Sufficiency § If in the STAR Report comp set data is missing this relates back to “sufficiency”. The Response Page will determine the reason for the missing data. § If a percent change number is missing check the related months this year and last year. § If multiple time period numbers, such as YTD or MTD are missing, check all the months or days involved. Exam Worthy!

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. § This eliminates the concerns that a property in a comp set is providing inaccurate Supply numbers. Exam Worthy!

Fun with Excel Spreadsheets! § Go to the Mind Stretcher Folder in Laulima § Open the STR Exercises Folder § Open the Module 2 Folder § Click on the Hotel EXCEL Math Module 2, Part 2 COMP SET File Page One § In the first sheet labels COMP SET, determine… § Does the COMP SET meet the Sufficiency Standards? § Does the COMP SET meet the Percentage Check

Fun with Excel Spreadsheets! § Go to the Mind Stretcher Folder in Laulima § Open the STR Exercises Folder § Open the Module 2 Folder § Click on the Hotel EXCEL Math Module 2, Part 2 COMP SET Starting with the Table of Contents § Formulate the worksheets to calculate the required data in each of the 5 tabs of the spreadsheet § Refer to your power point for assistance with formulas

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