Benchmarking, Data Analysis, and Reporting
Competitive sets and index interpretation
Benchmarking compares a hotel with a relevant competitive set rather than with the market as a whole. The competitive set should reflect location, segment, service level, and demand generators. It is a judgment sample, not a census, so participation and data quality matter. The standard rooms indices are occupancy index (MPI) = hotel occupancy ÷ comp-set occupancy × 100; ADR index (ARI) = hotel ADR ÷ comp-set ADR × 100; and RevPAR index (RGI) = hotel RevPAR ÷ comp-set RevPAR × 100. RGI also equals MPI × ARI ÷ 100. An index above 100 means the hotel is capturing more than its fair share; below 100 means less.
Reporting turns data into decisions. Common-size statements express each line as a percentage of revenue; variance analysis compares actual, budget, and prior year; trend analysis uses 28-day periods, month-to-date, and year-to-date to avoid day-of-week distortion. Total revenue and profit benchmarks such as TRevPAR and GOPPAR supplement RevPAR, especially for full-service hotels with F&B. Dashboards should distinguish absolute performance from share, and correlation from causation.
Traps: treating a rising index as a rising RevPAR-both can move in opposite directions; comparing a hotel with a comp set that includes different service levels or currencies; ignoring day-of-week and calendar shifts; and using a small sample as if it were the market.
Worked example: hotel ADR is $180 and comp-set ADR is $150, so ARI = 120. Hotel occupancy is 70% and comp-set occupancy is 75%, so MPI = 93.3. RGI = 120 × 93.3 ÷ 100 = 112. Hotel RevPAR = 0.70 × $180 = $126; comp-set RevPAR = 0.75 × $150 = $112.50; $126 ÷ $112.50 = 112. Rule of thumb: above 100 is share gain, but confirm it is not bought with discounting.