The STaR Report is a weekly and monthly report generated by Smith Travel Research that gives you a snapshot of your Occupancy, Average Daily Rate and Revenue per Available Room as compared to your selected Competitive Set and as compared to the same time, last year. It is a great tool for creating and managing marketing strategies, but if you don’t know how to read it and interpret it, you are wasting your company’s money.
There are a lot of moving parts associated with the STAR Report, but we are going to start with understanding the basics in order to achieve the ultimate goal.
PARTS: Occupancy and Rate
GOAL: Positive RevPAR IPC
The top block of the report shows all numbers for the current month:
The bottom block of the report shows all numbers for the current month as compared to the same time last year:
The side barbreaks the data down by different time parameters to help you get a feel for the trends involved:
The information in the grid is on Occupancy, Average Daily Rate and Revenue per Available Room and we will use this hotel’s July 2013 STAR Report to demonstrate the calculation of all of the numbers.
My Property: Your hotel’s occupancy is found by dividing the total number room nights sold* by the total number of available room nights in a month. This is a 100 room hotel and there are 31 day in July. This hotel sold 2,625 rooms this month. *Rooms sold does not account for comp rooms.
2625/ 3100 = .8467 or 84.7%
Comp Set: This is found by taking the average of all of your competitors’ occupancy percentages.
It is important to note that this number is based on Occupancy percentage and for a 101 room hotel, 80% means a very different number (81 rooms sold) than it does for a 150 room hotel (120 rooms sold) or a 60 room hotel (48 rooms sold). This is something to consider when setting up your Comp Set for the STAR Report.
Index: The Index is how much of the total market share in sold room nights your hotel was able to capture.
If each hotel in this competitor set, including yours, was the same size as yours, and was able to book the same number of room nights, then each of you would be at 100% of the market SHARE.
2,625/ 2,625 =1 or 100%
This hotel, however, is showing a higher occupancy than the competitors and to see this hotel’s share of the market, you would divide My Property Occupancy Percentage by the Comp Set’s combined Occupancy Percentage:
84.67/ 81.05=1.045 or 104.5%
From this, you can see that if the index is over 100%, you are doing better than your competitors. Some companies may require you to be at 110% OI or even 120%. You need to know what your company’s goal is for you.
My Property: Your hotel’s ADR is found by dividing the total room revenue for the month by the number of room nights sold.* This hotel sold 2,625 rooms this month and the total room revenue for the month is $147,757. *Since “Rooms Sold” does not include comp rooms, a “Comp” rate will not lower your ADR; however, a Zero Rate or very low rate will.
$147,757/ 2625 = $56.29
Comp Set: This is found by taking the average of all of your competitors’ ADRs.
Index: The Index is how much of the total market share in rate that your hotel was able to capture.
56.29/ 51.66 = 1.09 or 109%
As with the Occupancy Index, if you are at 100%, you are even with your competitors. You are only winning if the ADR Index is above this.
My Property: Your hotel’s RevPAR is found by dividing the total room revenue for the month by the total number of room nights available for sale at your hotel. This is a 100 room hotel and there are 30 day in July, so the total AVAILABLE room nights are 3100 and again, the room revenue for this hotel this month is $147,757.
147,757/ 3100 = $47.66
Comp Set: This is found by taking the average of all of your competitors’ RevPAR percentages.
It is important to see that RevPAR is a culmination of your attempts to achieve a balanced Occupancy and Rate. Play with the numbers to see how your property can get the highest RevPAR. Selling a ton of rooms at a dropped out rate or selling a few rooms at an exorbitant rate will both serve to tank the RevPAR.
Index: The Index is how much of the total market share in RevPAR your hotel was able to capture.
47.66/41.87 = 1.138 or 113.8%
If you have played the game well, your RevPAR Index will be over 100%. This is your ultimate goal when setting and keeping up with rate changes based on occupancy trends.
The Formula for all PERCENT CHANGE numbers is the difference from LAST YEAR to THIS YEAR (This Year minus Last Year) divided by LAST YEAR.
My Property:57.8-56.9 = 0.9 0.9/56.9 = 0.016 or 1.6%
Comp Set:55.5-63.7 = -8.2-8.2/63.7 = 0.128 or -12.8%
Index: 104.2-89.4 = 14.8 14.8/89.4 = .166 or 16.6%
In this case, our occupancy is trending up from year over year for this month.
My Property:49.87-53.71 = -3.84-3.84/53.71 = -0.071 or -7.1%
Comp Set:45.29-44.86 = 0.430.43/44.86 = .01 or 1%
Index:110.1-119.7 = -9.6-9.6/119.7 = -0.08 or -8%
In this case, our rate is trending down from year over year for this month.
My Property:28.34-30.56 = -2.22-2.22/30.56 = -0.072 or -7.2%
Comp Set:25.13-28.56 = -3.43-3.43/28.56 = -0.12 or -12%
Index: 114.8-107 = 7.87.8/107 = 0.072 or…
In this specific case, our hotel had to suffer a little in rate to gain a higher occupancy and ultimately a higher RevPAR, while the competition actually raised the rates and the offset loss of occupancy was too great. This is a balancing act! In the end, even though this market was obviously down from last year to now, we played the game right and our RevPAR was not AS LOW AS our competitors, which means we have a
June McCreight began her career in the hospitality industry as a housekeeper in 1996. In the years since, she has risen through the ranks, learning maintenance, front office, sales and revenue management, property management and district management, bench management and opening team management. She has trained hundreds of hoteliers and won many awards for her management successes. In 2011, June wrote and published, The Strangers in My Beds, a fictional novel based strictly on the strange events of her career in hotels. In 2014, June partnered with her father, a very accomplished software architect, and opened the business, Coba Enterprise Management, LLC with a very unique and specialized CMMS (Computer Maintenance Management System) software for hotels.