This article explains the meaning of KPIs and Indexes and details the most important numbers to focus on when analyzing weekly and monthly STAR reports.
STAR report (weekly & monthly) is an essential benchmarking tool. The report allows the subject hotel to compare its performance against the competitive set (comp set). Based on the report, hoteliers can conclude if the current market strategy is successful and make adjustments, if necessary, for the future.
STAR report consists of different data points: KPIs, index numbers, ranks, % change, etc. It's essential to understand what these numbers mean and how to interpret them.
The report provides core hotel KPIs for the subject hotel and for the competitive set.
Average Daily Rate (ADR) = Total room revenue / Total rooms sold
Occupancy (Occ) = Total rooms sold / Total rooms available for sale
Revenue per Available Room (RevPAR) = Total room revenue / Total rooms available for sale
Revenue per Available Room (RevPAR) = ADR x Occ
By looking at these numbers, hoteliers can answer the following questions:
How did occupancy (Occ), average daily rate (ADR), revenue per available room (RevPAR) of my hotel compare to ADR, Occ and RevPAR of the group of competitors in the market (comp set)?
What drove the revenue generation (RevPAR) for my hotel versus the competitive set. Was it Occupancy, ADR, or both?
STAR report divides hotel's performance KPIs by the competitive set's performance KPIs to generate Index numbers.
If the Index number equals 100% (fair share), it means the hotel's performance is the same as the performance of the competitive set. Below 100% implies that the hotel underperforms and above 100% implies hotel's performance is better than comp set's in terms of KPIs.
In plain words, a fair share (100%) is what the market gives the hotel. Above fair share is what hotel aims to take from the market by applying successful strategies.
Market Penetration Index (MPI) = Hotel Occupancy / Comp Set Occupancy
Average Rate Index (ARI) = Hotel ADR / Comp Set ADR
Revenue Generation Index (RGI) = Hotel RevPAR / Comp Set RevPAR
By looking at these numbers, hoteliers can answer the following questions:
