about comparing its performance to similar hotels in the city. If, for example, the
Altoona is a full-service hotel that offers many upscale amenities, it may not be crit-
ical to know how it is performing compared with limited-service, budget
hotels in the
city. The Altoona client is not likely to be a client of these budget properties. To make
STR data more useful, the FOM can select and compare data from competitive
hotels (the competitive set) whose performance would, theoretically, mirror that of
the Altoona.
A competitive set consists of a group of four or more
properties selected by man-
agement of an individual hotel or that hotel’s parent company. The competitive set
enables FOMs to compare their property’s performance with the aggregate performance
of their direct competitors. According to STR policy, a single hotel can represent a
maximum of 35 percent of the reporting
rooms of any competitive set; STR sets this
limit to protect each property’s proprietary data. The hotel itself may or may not be
included in its competitive set, depending on the STR reports the hotel receives. The
weekday/weekend, daily detail by month, and daily detail
by week competitive set
reports always exclude the subject hotel.
To fully understand the STR index, consider the data presented in Figure 11.
The figure shows data about the Altoona hotel’s occupancy and that of its competi-
tive set along with index information. STR uses indexes to measure a property’s per-
formance in three key areas: occupancy, ADR, and RevPar. An index is computed by
dividing the performance of the subject hotel by the performance of the competitive
set hotels:
An index of 100 indicates that the property has captured
its fair share of business;
it is performing on par (equally) with its competitive set. This is the case in Scenario
2. An index greater than 100 indicates a property is capturing more than its fair share
(Scenario 1), whereas an index below 100 indicates the property is capturing less than
its fair share (Scenario 3).
STR data are used for a variety of purposes, including
the improvement of fore-
cast accuracy. Let’s consider the occupancy data in Figure 12, which are from a sec-
tion of a STR trend report (monthly rooms sales) showing occupancy data for the
Altoona Hotel for a 12-month period. The data show that the Altoona Hotel, like
its competitive set, has experienced an occupancy decline through the last three
months ending. October, 200Z, compared with 200X (
⫺
5.0
percent for the Altoona
and
⫺
14.2 percent for the competitive set; see line 16). However, its occupancy is up
Performance of subject hotel
Performance of competitive set hotels
=
Index
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