Every week, your STR report lands in your inbox with pages of occupancy, ADR, and RevPAR comparisons against your competitive set. Most owners glance at the headline RevPAR number, note whether it went up or down, and move on. The real story is in the indexes.
Start with the indexes, not the raw numbers
Raw occupancy and rate figures tell you what happened at your hotel. The indexes tell you what happened relative to the market, and that is the number your lender, your brand, and your partners actually care about. An index of 100 means you’re performing exactly in line with the comp set. Above 100, you are outperforming the comp set; below it, you are leaving share on the table.
- MPI (Market Penetration Index): your occupancy divided by the comp set’s occupancy. Below 100 means competitors are filling more rooms than you, proportionally.
- ARI (Average Rate Index): your ADR divided by the comp set’s ADR. Above 100 means you are commanding a rate premium.
- RGI (Revenue Generation Index): your RevPAR divided by the comp set’s RevPAR. This is the single number that combines both levers, and the one to watch trend lines on.
The story is in the combination. A high MPI with a low ARI usually means your team is buying occupancy with rate, filling rooms by being the cheapest option on the shelf. The reverse suggests a rate strategy that is holding firm but costing you heads in beds. Neither is automatically wrong, but both should be deliberate decisions, not accidents.
The comp set caveat
Your indexes are only as honest as your competitive set. If your comp set includes a newly renovated property while yours is mid-PIP, or a hotel that just changed flags, the comparison distorts. Owners should review the comp set at least annually and ask whether each property still belongs. A bad comp set makes a good operator look mediocre — or worse, flatters a weak one. Changes have to meet STR’s comp set rules, and for franchised hotels the brand or management company is often involved, so raise it early.
Questions to ask after every report
- Did RevPAR move because of us, or because of the market? If RevPAR fell but RGI held steady, the whole market softened. If RGI fell, we lost ground to the comp set.
- Which day of week drove the change? Weekday corporate softness and weekend leisure softness have very different fixes.
- Is our share gain showing up in GOP, or did we spend it on commissions and labor to get there?
This is exactly the translation work we do in every engagement: turning a dense benchmarking export into three sentences you can act on. If your STR report currently goes straight to a folder, it is worth a conversation.