Demonstrate how KPIs and percent changes are calculated when it comes to comp set data.
KPIs for the comp set data are calculated basing on aggregation of raw data for each hotel taking part in this comp set. Therefore, firstly Supply, Demand and Revenue should be combined for each hotel in the comp set. The next step is application of standard Occupancy, ADR and RevPAR formulas to the aggregated indicators calculated before.
Percent changes are calculated just the same way as in the case of calculating it for a particular hotel. This means, that indicator relating to the previous period should be derived from current period indicator. The result of this operation is then divided by the previous period indicator and multiplied by 100 in order to get the percentage value instead of decimal value.
Demonstrate how indexes and ranking data are calculated comparing the subject to the comp set.
The indexes are used to compare the performance of the given subject and the comp set. Index is calculated via division of subject value by comp set value and multiplying the result by 100. A number exceeding 100 means that subject’s performance is better than comp set’s performance. Otherwise subject’s performance is worse than comp set’s performance.
Ranking is another method of comparing current subject to the comp set, which shows the hotel’s position comparing to others. The lower ranking value is, the better hotel performs. It is displayed in format “X of Y”, where X is the given hotel’s position and Y is the total number of the hotels taking part in the comp set. For instance, “3 of 7” means that the hotel is the 3rd best among others in the comp set.
Explain the significance of indexes to the hotel industry.
Indexes are widely recognized as reliable indicators of how hotels perform within a given period of time. Index numbers can be calculated for daily and monthly periods in order to analyze hotel’s performance over various time periods. As indexes are very important indicators, even managers’ bonuses can be connected to them.
Explain the effect of non-reporting hotels in a comp set.
In case of non-reporting hotels presence in a comp set the following algorithm is performed. First, the basic indicators of Supply, Demand and Revenue are aggregated in order to shape the “sample” basic indicators. After that the “sample” ADR and Occupancy are calculated. The next step is Census Supply calculation, which means rooms available for all hotels and not only comp set participants. Than the Census Demand is calculated via Census Supply multiplication by the Sample Occupancy. Finally, the Census Demand is multiplied by the Sample ADR in order to get Census Revenue.
Eventually, such methodology assumes that non-reporting hotel has the same ADR and Occupancy indicator as the reporting hotels. This means that is it presumed that hotels making up the comp set are acting similarly.
When will different types of comp set data not appear on a STAR report?
There is a number of reasons why certain parts of comp set data can not appear on a STAR report. The situation can be clarified using Response Page. Monthly numbers can be missing in case less than three hotels reported for specific month. There can be no percent change number in case there is no source data to calculate it, which means that current or previous period data is missing. Finally, multi-month indicator can be not shown, if there’s no data regarding some of the months involved in this indicator calculation.
References
Smith Travel Research (2013). Hotel Math Fundamentals, the Metrics used by the Hotel Industry [PowerPoint slides].
