4 How Does STR Obtain Raw Data? Most raw property sales data is directly exported from the systems of the hotel companies. This helps increase the reliability of the data. Companies send STR a raw data file each month, week, and/or day.Some hotels and smaller companies enter the data on the STR web site. The web site can be used to enter monthly or daily data.(Users can also enter Segmentation data via the web – later)
5 Sample Raw DataHere is a sample monthly raw data file that STR would receive, containing data for multiple hotels:In most cases, companies provide their own unique hotel identification without a hotel nameA daily file would look the same except for the date field, YYYYMMDD orFictitious data, of course
6 Data Error ChecksSTR performs a large volume of comprehensive error checks upon the raw data.New data is compared to prior data for consistency.There are Occupancy and ADR limits related to geography and type of hotel. STR also tracks special events that would cause unusual Occupancies and ADRs.Any exceptions are verified with the data provider before the data is accepted.
7 STR Data GuidelinesSTR uses a strict set of definitions based on the “Uniform System of Accounts for the Lodging Industry”Supply (Rooms Available) – the number of rooms in a hotel multiplied by the days in the monthDemand (Rooms Sold) – number of rooms sold by a hotel, does not include complimentary rooms or “no- shows” (reservations not cancelled)Revenue – total room revenue generated from the sale of rooms, not including taxes. Includes service charges not resort fees, nothing else such as F&BThe Uniform System of Accounts is available from the AHLA or HFTP and is definitely worth taking a look at.
8 Raw Data Issues - Supply STR instructs hotels and companies to always report based upon “full availability” (the number of rooms in the hotel times the days in the month) even if some rooms may be out of service (painting, repairs, renovations).This is one of the things that STR checks when loading data. If the Supply number is different than “full available”, the data provider is contacted to verify the numbers. (There is a small range of acceptability.)A hotel could have added or dropped a room. Then the number of rooms in the Census database is changed.Advanced topic/issue
9 Raw Data Issues – No Shows & Cancellations No-shows – Hotels may charge a guest if they reserve a room and do not show up or cancel within the specified timeframe. The amount would be included in Room Revenue. There would be no addition to Room Demand.Group Attrition or Cancellation fees – If a group reserves a block of rooms and either does not fill their block or cancels the event, there may be some fee charged by the hotel. This amount would not go in Room Revenue. There would be not addition to Room Demand.Advanced topic/issue
10 Raw Data Issues - Revenue Service charges – Some hotels (in some countries) may add a charge similar to a gratuity which may or may not be actually paid to the staff. – This should be included in Room Revenue.Resort fees – Some hotels add an amount to include special amenities (spa, golf, tennis, fitness, pool) – This is not included in Room Revenue.There are other special considerations that are covered in the Uniform System of Accounts related to Frequent Guest, Wholesalers (commission, OTAs), Packages, Mixed-use situations, and barter transactions.Advanced topic/issue
11 Key Performance Indicators From these raw data values, STR calculates the three hotel industry key performance indicators (KPIs) :Occupancy - %Average Daily Rate (ADR) - $Revenue per Available Room (RevPAR) - $ important metric, based upon all rooms, some feel like it is better measurement of profitability
12 Occupancy = Demand / Supply DefinitionThe percentage of available rooms that were sold during a specific time period.CalculationOccupancy is calculated by dividing the demand (number of rooms sold) by the supply (number of rooms available). This is a percentage.Occupancy = Demand / Supply
13 Monthly Occupancy - Formula BCDEFG1SupplyDemandRevenue(Formula)Occupancy (%)2Jan-1031002345198765C2 / B2 * 10075.63Feb-1028002002175432C3 / B3 * 10071.54Mar-101776175012C4 / B4 * 10057.35Apr-1030002468234567C5 / B5 * 10082.36May-102987312345C6 / B6 * 10096.4Hotel Math 101 Excel.xlsx - Occupancy!A1You could multiply times 100 (then format as a number withone decimal) or format as a percentage (adds % symbol)
14 Hint – High Occupancies Normally Occupancies for a hotel will always be below 100%.It is not uncommon for a hotel to have a daily Occupancy of 100% if they sell out for a night.It is less common for a hotel to have a monthly Occupancy of 100%There are occasions where a hotel will have an Occupancy greater than 100%. This might happen in the case of an Airport hotel that could actually sell the same room twice in the same day.
15 ADRDefinitionA measure of the average rate paid for rooms sold during a specific time period.CalculationADR is calculated by dividing the room revenue by the demand (rooms sold). This is a dollar amount.ADR = Revenue / Demand
16 Monthly ADR - Formula A B C D E F G 1 Supply Demand Revenue (Formula) 2Jan-1031002345198765D2 / C284.763Feb-1028002002175432D3 / C387.634Mar-101776175012D4 / C498.545Apr-1030002468234567D5 / C595.046May-102987312345D6 / C6104.57Hotel Math 101 Excel.xlsx - ADR!A1You could format as a “$” (adds symbol)or as a number with two decimals
17 RevPAR = Revenue / Supply DefinitionA measure of the revenue that is generated by a property in terms of each room available. This differs from ADR because RevPAR is affected by the amount of unoccupied rooms, while ADR only shows the average rate of rooms actually sold.CalculationRevPAR is calculated by dividing the room revenue by the total number of rooms available. This is a dollar amount.RevPAR = Revenue / Supply
18 Monthly RevPAR – Formula BCDEFG1SupplyDemandRevenue(Formula)RevPAR ($)2Jan-1031002345198765D2 / B264.123Feb-1028002002175432D3 / B362.654Mar-101776175012D4 / B456.465Apr-1030002468234567D5 / B578.196May-102987312345D6 / B6100.76Hotel Math 101 Excel.xlsx - RevPAR!A1You could format as a “$” or as a number with two decimals
19 Hint – Importance of RevPAR RevPAR is a critical metric for the Hotel Industry since it is a combination of Occupancy and ADR.A hotel could have a 100% Occupancy because of a low ADR. The RevPAR will reflect that.A hotel could have a very high ADR, but only sell one room. The RevPAR will reflect that as well.Frequently when a hotel (or the GM or Sales Manager) is evaluated or measured, RevPAR is the metric that is being looked at.
20 Percent Change = (This Year – Last Year) / Last Year * 100 Percent ChangesDefinitionThe comparison of This Year (TY) numbers vs. Last Year (LY) numbers, whether a raw value or a KPI. The percent change illustrates the amount of growth (up, flat, or down) from the same period last year.CalculationThe This Year number minus the Last Year number divided by the Last Year number. This is a percentage.Percent Change = (This Year – Last Year) / Last Year * 100Remember the parentheses! (“order of operations”)
21 Demand Percent Change A B C D E F G 1 This Year Last Year ABCDEFG1This YearLast YearPercent Change2Demand(Formula)3Jan-1023452456(B3-D3)/D3*100-4.54Feb-1020022112(B4-D4)/D4*100-5.25Mar-1017761750(B5-D5)/D5*1001.56Apr-102468(B6-D6)/D6*1005.27May-1029872555(B7-D7)/D7*10016.9Hotel Math 101 Excel.xlsx - 'Demand Percent Change'!A1You could multiply times 100 or format as a percentage
22 Hint - Percent Changes in General Percent Changes are closely scrutinized by the industryA positive Percent Change indicates that the number this year is greater than the number last year. The number is growing or improving.A negative Percent Change indicates that the number this year is less than the number last year. The number is decreasing or getting worse.
23 Hint - % Changes for Raw Values The Percent Changes for raw values such as Supply, Demand, and Revenue are valuable bits of informationSupply Percent Change shows whether there are more or less rooms this year versus last yearDemand Percent Change shows whether there are more or less rooms sold (guests spending the night) this year versus last yearRevenue Percent Change shows whether there is more or less money being made by the hotel or hotels (and therefore being spent by those guests)
24 ADR Percent Change A B C D E F G 1 2010 2009 Percent Change 2 ADR ABCDEFG120102009Percent Change2ADR(Formula)3Jan-1084.7681.93(B3-D3)/D3*1003.44Feb-1087.6388.85(B4-D4)/D4*100-1.45Mar-1098.54100.07(B5-D5)/D5*100-1.56Apr-1095.0495.24(B6-D6)/D6*100-0.27May-10104.57116.93(B7-D7)/D7*100-10.6Hotel Math 101 Excel.xlsx - 'ADR Percent Change'!A1You could multiply times 100 or format as a percentage
25 Hint - % Changes for KPIs Occupancy Percent Change shows whether the Occupancy this year is greater or less rooms than the Occupancy last year. This could be related to Supply and Demand changes.ADR Percent Change shows whether the average rate this year is greater or less than the average rate last year.RevPAR Percent Change shows whether the RevPAR amount is greater or less than the amount last year. This could be related to Occupancy and ADR differences.
26 Hint – RevPAR % ChangeRevPAR Percent Change is roughly the combination of Occupancy and ADR Percent Change. (This is great to know for checking your math.)If Occupancy Percent Change is 2% and ADR Percent Change is 2%, than RevPAR Percent Change will roughly be 4%. You have to actually do the math to get the exact amount.If Occupancy Percent Change is 2% and ADR Percent Change is -2%, than RevPAR Percent Change will roughly be 0%. Again, you have to do the math to get the exact amount.
27 Hotel Date-Related Definitions In addition to monthly data, daily data is critical to the hotel industry. Data is analyzed at the daily level as well as aggregations of daily data. Here are common groups of days:Week = Sunday through SaturdayWeekday = Sunday through ThursdayWeekend = Friday and Saturday, this does differ in various parts of the world, i.e. the MideastDay of Week = data for individual days of the week, i.e. Day of Week per month or Day of Week per year
28 Daily vs. Monthly DataThe formulas for daily KPIs and Percent Changes are the same as for monthlyObviously, the date fields are different:– monthly– dailyMonthly percent changes always compare the current month this year to the same month last year. So July of 2011 would be compared to July of 2010.is compared to
29 Comparable Dates for Daily Data Daily percent changes are not based upon exact dates. July 15 in 2010 is a Thursday, but July 15 in is a Wednesday.Most daily percent changes are based upon “comparable days”, in other words the same day of week last year with the closest date:Thu is compared to ThuSat is compared to SatThe comparable dates will always be off by one or two days, depending upon leap year.
30 Multiple Time Periods Multiple time periods for monthly data include: Year-to-Date (YTD)Running 12-Month (12-Month Moving Avg)Running 3-MonthMultiple time periods for daily data include:Current WeekMonth-to-Date (YTD)Running 28-Day (different than Running 4-wk)The metrics for all of these time periods are based upon the aggregated raw data
31 YTD Supply, Demand, & Revenue ABCD1SupplyDemandRevenue2Jan-10310023451987653Feb-10280020021754324Mar-1017761750125Apr-10300024682345676May-1029873123457(Formula)sum(B2:B6)sum(C2:C6)sum(D2:D6)8May YTD1510011578Hotel Math 101 Excel.xlsx - 'YTD Supply, Demand, Revenue'!A1You can use the SUM function to aggregate the raw values
32 YTD Occupancy, ADR, & RevPAR ABCDEFG1SupplyDemandRevenueOccupancyADRRevPAR2Jan-10310023451987653Feb-10280020021754324Mar-1017761750125Apr-10300024682345676May-1029873123457YTD151001157876.794.6772.598(Formula)C7/B7*100D7/C7D7/B7Hotel Math 101 Excel.xlsx - 'YTD Occ, ADR, RevPAR'!A1Aggregate raw values, then apply same formulas as before
33 Other Multiple Time Periods The Raw data for other monthly and daily time periods are calculated the same way by aggregating the raw data for every month or day in the entire time periodThe KPIs (calculated metrics of Occupancy, ADR, and RevPAR) for multiple time periods are always calculated from the aggregated raw dataNumbers for multiple time periods never use averages of monthly or daily values. (Some people mistakenly compute YTD occupancy by adding the occupancy of each month and dividing by the number of months.)
34 Hint – Multiple Time Periods Current Month numbers show the performance for a single month and YTD numbers show how performance is unfolding for the current year.Running 3-Month numbers show a little more of a performance trend instead of just the Current Month number.Running 12-Month numbers show a longer performance trend. These numbers can be helpful at the beginning of the year when the YTD number only includes a small number of months. Running 12- Month numbers also remove seasonality effects.STR frequently uses Running 12-Month data in historic graphs
35 Percent Changes for Multiple Time Periods The percent changes for multiple time periods are based on the aggregated values or the calculated metrics (which are derived from the aggregated values) for this year compared to the same values for last yearPercent changes for daily data are based upon groups of comparable days, with the exception of Month-to- Date numbers which are based on a date-to-date comparison
37 Weekday/Weekend and Day of Week Data vs. Monthly Data Sometimes a hotel will submit daily data that does not add up exactly to the monthly numberThere are good reasons for this; some systems do not accept adjustments to daily data, only to the month numbersSTR will slightly adjust the daily numbers based upon the monthly data when they are aggregated to generate day of week and weekday/weekend numbersUse percentages for each day, ensures WD/WE adds up
38 Percent Changes and WD/WE or Day of Week Data Weekday/Weekend (WD/WE) Percent Changes compare all the aggregated weekday or weekend data (per month or other time period) this year to the same data last yearDay of Week (DOW) Percent Changes compare all the aggregated daily data for a single day (per month or other time period) this year to the same data last year
39 Running 4 Week DataThe Weekly Reports compare individual daily data for the Current Week to the Running 4 Week numbersThe Running 4 Week numbers are the aggregated data for a single day for the last 4 weeks, i.e.: the last 4 MondaysA hotel can compare their Monday performance metrics to the average of the last 4 Mondays to see if they are doing better or worse on a single day of the week
40 Full Availability – Subject Hotel Occasionally a subject hotel may report a Supply number that is different than the number of rooms in the property times the days in the periodIf this happens in the case of the subject hotel, their STAR report will always reflect the Supply and the corresponding Occupancy based upon the number the hotel actually reported.STR does not change the Supply number of the subject hotel on their own STAR report“Full Availability” is an advanced concept
41 Full Availability Example - Subject ABCDEFGH1Date# RmsActual SupplyReport-ed SupplyDemandRevenueFormulaOccu-pancy2Jan-1010031002345198765E2 / D2 * 10075.63Feb-10280027442002175432E3 / D3 * 10073.04Mar-1029451776175012E4 / D4 * 10060.35Apr-10300027002468234567E5 / D5 * 10091.46May-102987312345E6 / D6 * 10096.4Occupancy for Subject based on reported Supply, not Actual
42 Questions Briefly describe how STR obtains raw property data Identify the various metrics used by the hotel industryExplain how metrics are calculated when it comes to multiple time periodsCompare the differences between how monthly and daily data is treatedUse Excel and sample raw data to demonstrate the formulas used to calculate the various numbers
44 Key Performance Indicators for the Competitive Set Numbers for the comp set are derived based on aggregated raw data for each separate hotelSupply, Demand, and Revenue numbers are the combined values of each hotel in the comp setOccupancy, ADR, and RevPAR numbers are based upon the aggregated Supply, Demand, and Revenue. (They are never based upon a straight average of the Occupancies or ADRs of the comp set.)
45 Including or Excluding the Subject Hotel in the Competitive Set STR allows companies to choose whether to include or exclude the data for the subject hotel in the numbers for the comp set. This is done at the company, not hotel level. All companies exclude when it comes to daily data.Historically companies usually included the data for the subject hotel, but more recently most companies have decide to exclude the subjectSome people feel that having the subject data included in the comp set numbers distorts or dilutes the comp set
46 Comp Set Supply, Demand, & Revenue ABCDE1PropertyDateSupplyDemandRevenue211111May-103100222218765432222232552468198765433333294523452233445444442790198716543265555341032102987657Comp Set15500122328(Formula)sum(C2:C6)sum(D2:D6)sum(E2:E6)PropertyAggregate raw values for each member of the comp set
47 Comp Set Occupancy, ADR, & RevPAR ABCDEFGH1PropertyDateSupplyDemandRevenueOccupancyADRRevPAR211111May-103100222218765432222232552468198765433333294523452233445444442790198716543265555341032102987657Comp Set155001223278.987.8069.298(Formula)D7/C7*100E7/D7E7/C7PropertyApply KPI formulas to aggregated comp set data
48 Percent Change Numbers for the Competitive Set Percent Change numbers for the comp set are calculated similarly to the ones for the subject property(This Year – Last Year) / Last Year * 100These numbers show increases or decreases in performance this year versus last year
49 Comp Set Occupancy, ADR, & RevPAR Percent ChangesABCDEFGHIJK1This YearLast YearPercent Changes2DateOccu-pancyADRRev-PAROccupancyRevPAR3Comp SetMay-1078.987.8069.2982.693.8677.50-4.4-6.5-10.64(Formula)(C7-F7)/F7*100(D7-G7)/G7*100(E7-H7)/H7*100Hotel Math 101 Excel.xlsx - 'Comp Set KPI Percent Changes'!A1Calculate TY & LY KPIs, then apply % Change formulas
50 Index NumbersThe Index numbers compare the performance of the subject property to the comp setSubject Value / Comp Set Value * 100A number greater than 100 means the subject property outperformed the comp set and a number below 100 means the comp set outperformed the subject propertyIndex numbers are available for Occupancy, ADR, RevPAR and the Percent ChangesIndex numbers are percentages, multiple * 100 or format as %
51 Importance of Index Numbers Index numbers tend to be relied upon heavily by the industry to evaluate the performance of hotelsOccupancy, ADR, and RevPAR Index numbers show the current performance of the subject hotel compared to the comp setThe index percent change numbers for these same KPIs show if the subject hotel is improving compared to the comp setThe headquarters of many companies receive corporate index reports listing each hotel with their index numbersSome companies relate managers’ bonuses to index numbers
52 Occupancy, ADR, & RevPAR Indexes ABCDEFGHIJSubject PropertyComp SetIndex Numbers1Occu-pancyADRRev-PAROccupancyRevPAR2May-1096.4104.57100.7678.987.8069.29122.1119.1145.43(Formula)B2/E2*100C2/F2*100D2/G2*100Hotel Math 101 Excel.xlsx - 'Occ, ADR, RevPAR Indexes'!A1Calc KPIs for Subject & Comp, then apply Index formula
53 Index Percent Change Numbers First you calculate the Index numbers this year for Occupancy, ADR, and RevPARNext you calculate the Index numbers for last year using the same formulasThen you can calculate the Percent Changes for the Index numbers, this shows whether the Subject is improvingIndexes could be below 100 TY, but if Percent Changes are positive, the Subject hotel is improving more than the average of the comp set hotelsIndex of 90 TY and 80 LY yields an Index % Chg of 12.5%
54 Occupancy, ADR, & RevPAR Index Percent ChangesABCDEFGHIJ1Index Numbers2This YearLast YearPercent Change3DateOccu-pancyADRRevPAROccupancy4May-10122.1119.1145.499.8124.6124.422.3-4.416.95(Formula)(B2-E2)/E2 *100(C2-F2)/F2 *100(D2-G2)/G2 *100Hotel Math 101 Excel.xlsx - 'KPI Index Percent Changes'!A1Calc indexes TY & LY, then apply % Change formulas
55 Hint - Index Percent Changes Here is a hypothetical situation - a subject hotel has Occupancy, ADR, and RevPAR indexes that are all below The General Manager gets a call from the Regional Manager who says, “great job”. Why?The Regional Manager may be looking at index percent change numbers that are all strongly positive. So the subject hotel is underperforming the comp set, but the subject hotel is catching up (improving more than the comp set average). That is reason for the positive feedback.
56 Hint - Index % Changes continued The opposite scenario could also be true. The subject hotel could have indexes all well above But the Regional Manager could call with concern.If the Index Percent Change numbers are all negative, it means that the comp set members on average are improving more than the subject hotel and could catch up.The RevPAR Percent Change number is a very popular number and is often looked at when it comes to things like bonuses.
57 Ranking Data – What is it? STAR Property Reports include Ranking information for Occupancy, ADR, RevPAR and each Percent Change, comparing the subject hotel to the comp setThe Ranking data would be in the format of “X of Y”, where X is the subject hotel’s position and Y is the number of participating properties in the comp set which includes the subject hotel.For example “2 of 7” would mean the subject hotel had the 2nd best value in the comp set of 7Ranking data gives you more than just the KPIs & Indexes
58 Occupancy Ranking Data – How? The values for each hotel in the comp set including the subject hotel are sortedThen the position of the subject hotel is determined within the groupHere are sample values of the subject and the comp setSTR#1234234534564567 (Subject)56786789Value878583827875Rank1 of 62 of 63 of 64 of 65 of 66 of 6Subject had the 4th highest occupancy in the comp set of 6
59 Subject had the 2nd highest ADR (with 2 others) in comp set ADR Ranking Data – TiesJust in case two or more hotels are tied when it comes to a specific value, i.e.: they have the same exact number, then each hotel would get the same numberAll hotels below with a $95 ADR get a rank of “2 of 6”:STR#1234234534564567 (Subject)56786789Value$97$95$92$88Rank1 of 62 of 65 of 66 of 6Subject had the 2nd highest ADR (with 2 others) in comp set
60 Percent Change Ranking Data The Percent Change Ranking data is also very important. The format is exactly the same as the KPIs.The Percent Change Ranking shows which hotel in the comp set had the highest Percent Change. So “2 of 7” would mean the subject hotel had the 2nd best percent change in the comp set of 7. This gives an indication of which hotel is improving the most.Remember, the percent changes could be negative (even all of them), so this could indicate that you decreased the least.
61 Beyond Ranking – Bandwidth Data Bandwidth data actually provides more information than Ranking data.Bandwidth reports show the daily Occupancy and ADR of the Subject hotel compared to the range of values for the comp set hotels.The Bandwidth information will provide an approximation of the high and low values of each metric on a daily basis.Samples of Bandwidth reports are available.
62 Multiple Time Periods and Comp Set Data Multiple time periods are handled the same way for a comp set as they are handled for a subject propertyThe Raw data for monthly and daily time periods are always aggregated and then the calculations are applied to the aggregated dataSo there are two levels of aggregations, first the members of the comp set to get to a single month, and then multiple months to get to the YTD number.
63 Sufficiency of Comp Set Data If a Comp Set has 3 or more participating hotels (submitting actual data) other than the subject, then that comp set is defined as “Sufficient”. The numbers for the comp set can then appear on the STAR report.Percent change numbers will appear if the comp set had sufficient data this year and last yearMulti-month numbers are considered to be sufficient if greater than 50% of the months or day included in the multi-month period are sufficient
64 Hint – “Missing” Comp Set Frequently hotel staff receive their STAR Report and notice that comp set data is missing. The Response Page will help you determine the reason for the missing data.If a monthly number is missing, check the number of hotels that reported for that specific month to see if there were more than three.If a multi-month, i.e. YTD number is missing, check all the months involved.If a percent change number is missing check the related months this year and last year.
65 Changing Comp Set data over time Sometimes a hotel or company will report adjusted numbers after submitting the original data. (This data is carefully checked and verified by STR.)In these cases the comp set numbers for a prior month may change after the fact. So a hotel may receive a STAR report this month with a different comp set number than the STAR Report they received during the prior month.The reason for the change to the prior number is the adjusted data for one of the hotels in their comp set.
66 Comparing Weekly and Monthly Reports Weekly Reports include a Month-to-Date number that is solely based upon daily data. Hotels watch this number since it is an indication of the monthly performance.Sometimes when the Monthly Report arrives, the number is different than the Weekly Reports.There can be two explanations. There may be a hotel in the comp set that submits monthly data but not Daily data. Check the Response pages.A hotel may submit monthly data that is different than the sum of all of the daily data. For example, some hotels can only make adjustments to monthly data.
67 Non-Reporting Hotels in the Comp Set There may be situations where one or more hotels in a comp set does not report data for a month or more. STR uses the following methodology to “estimate” data for the non-reporting hotel.First, the Supply, Demand, and Revenue for the participating properties is aggregated. This is the “Sample” Supply, Demand, and Revenue.Next, an Occupancy and ADR is calculated based on the Sample data,
68 Non-Reporting Hotels in the Comp Set - continued Then the Supply is determined for all hotels in the comp set, simply the number of rooms times the days in the month. This is referred to as the “Census” Supply.This Supply number is multiplied times the Sample Occupancy to derive the Census DemandThe Census Demand is multiplied times the Sample ADR to derive the Census RevenueSo the non-reporting hotel is “estimated” based upon the average of the other reporting hotels
69 Non-Reporting Hotel Example ABCDEFGH1PropertyDate# RmsSupply (Actual)DemandRevenueOccu-pancyADR211111May-10100310022221876543222221053255246819876543333395294523452233445444449065555110341032102987657Comp Set Sample #s410127101024590852880.688.688Comp Set Census #s50015500124949(Formula)C7 * 31D8 * G7 /E8 * H7Calc Occ & ADR based on Sample, multiply * Total Supply
70 Non-Reporting Hotels the month after Sometimes a hotel that does not report one month may submit the missing data by the next month.When the STAR Report is generated the next month, the numbers for the prior month change. Previously the non-reporting hotel was estimated based on the reporting hotels.Note that there could be two explanations for the change in the numbers. The missing hotel submitted actual data. The other hotels in the comp set could have submitted adjusted data.
71 “Consistent Sample” related to Comp Set data If a subject hotel has a non-reporting property (or a property that reports intermittently) in its’ comp set, that can possibly distort the comp set numbers. Or hotels that participate this year but not last year, or visa versa.You never know if a change in performance is related to what is actually happening with the comp set hotels or the fact that a single hotel’s data is missingThere are ways for a subject hotel to remove a non- reporting property from its’ comp set(Participation information for the comp set is displayedon the Response page of the STAR Report)
72 Full Availability and Comp Sets Occasionally a hotel in the comp set may report a Supply number that is different than the number of rooms in the property times the days in the periodIn those cases, STR uses the Supply number based upon full availability, not the number that the hotel reportsThis eliminates the concerns that a Subject hotel may have that a property in their comp set is providing inaccurate Supply numbersAdvanced concept
73 Full Availability Example ABCDEFGHI1PropertyDate# RmsActual SupplyReported SupplyDemandRevenueOccu-pancy (Full)Occu- pancy (Report)211111May-1010031002222187654322222105325533402468198765433333952945290023452233445444449027902199198716543265555110341032102987657Comp Set15500(14949)1223278.9(81.8)8(Formula)sum (D2:D6)sum (F2:F6)sum (G2:G6)D7/F7 *100Formulas are based upon Actual Supply, not Reported
74 QuestionsDemonstrate how KPIs and percent changes are calculated when it comes to comp set dataDemonstrate how indexes and ranking data are calculated comparing the subject to the comp setExplain the significance of indexes to the hotel industryExplain the effect of non-reporting hotels in a comp setWhen will different types of comp set data not appear on a STAR report?
76 Industry Data BasicsSTR uses a variety of segments to analyze performance of the hotel industryThere are geographic (market, tract) and non-geographic (scale, location) categorizationsSTAR Reports and corporate data files will frequently compare a subject hotel to nearby industry segmentsPublications, Destination Reports, and Trend Reports will also display the performance of industry segments
77 The Methodology for US Industry Data versus Comp Set Data The methodology used for arriving at US industry numbers is different than the one for arriving at comp set numbersActual data is used for hotels that participate and “modeled data” is used for hotels that do not participate. (This is why STR includes non-participants in their Census database of hotels.)The Actual and Modeled data are aggregated for all hotels in each industry segment in order to arrive at performance numbers
78 Modeling of US Industry Data STR estimates the data of non-participating US hotels to help increase the accuracy of the industry dataData for a non-participant is estimated based on participating hotels that are closest to the non- participant based on geography and price level. (A more detailed explanation is available if needed.)Modeling is performed for both monthly and daily US industry data.Possible to explain technical procedure used for modeling
79 Modeling continuedNo modeled data is ever used in the Comp Set numbers or for property or corporate data.STR uses a different methodology for non-US industry numbers. Non-US data is not modeled.Modeling does not take place if the hotel is closed (permanently) or if it is seasonally closed.If a hotel reports actual data after the fact (late), the modeled data is overwritten by the actual data.
80 Key Performance Indicators for Industry SegmentsThe Actual and Modeled data are aggregated for all hotels in each industry segment (market, tract, …)Supply, Demand, and Revenue numbers are the combined values of each hotel in the industry segmentThe Key Performance Indicators (Occupancy, ADR, and RevPAR) are based upon the aggregated Supply, Demand, and Revenue numbers
81 Industry Supply, Demand, & Revenue ABCDEFG1PropertyDate# RmsType of DataSupplyDemandRevenue211110May-10100Actual310022221876543222201053255246819876543333095Modeled294523452233445444409027902456234567655501103410321029876576660852635251120123487770115356530123123459Tract Scale700217001822410(Formula)sum (E2:E8)sum (F2:F8)sum (G2:G8)PropertyAccumulate Actual & Modeled Supply, Demand, & Revenue
82 Industry Occupancy, ADR, & RevPAR ABCDEFGHIJ1PropertyDate# RmsType of DataSupplyDemandRevenueOccu-pancyADRRev-PAR211110May-10100Actual310022221876543222201053255246819876543333095Modeled294523452233445444409027902456234567655501103410321029876576660852635251120123487770115356530123123459Tract Scale700217001822484.090.9176.3410(Formula)F9/E9 *100G9/F9G9/E9PropertyApply KPI formulas to the accumulated raw data
83 Percent Change Numbers for Industry SegmentsPercent Change numbers for industry segments are calculated exactly like the ones for the comp set or the subject property(This Year – Last Year) / Last Year * 100These numbers show increases or decreases in performance this year versus last year
84 Multiple Time Periods and Industry Data Multiple time periods are handled exactly the same for an industry as for a comp set or a subject propertyThe Raw data for the monthly and daily time periods are always aggregated and then calculations are derived based upon the aggregated data
85 Supply Numbers Over Time The number of rooms available for an industry segment or any group of hotels, including a comp set, can vary over time due to:New hotels opening - Hotels closingRoom additions - Room dropsNew Supply=Orig Supply+(Opens+Adds)–(Closes+Drops)The number of rooms available for segments such as scale, class, or brand can vary over time due to:Conversions in - Conversions outNew=Orig+(Opens+Adds+CvIns)–(Closes+Drops+CvOuts)
86 Seasonally Closed Hotels Some hotels close for one or more months out of a year. In the US, there are 1,460 seasonally closed hotels.Many are in resorts areas such as beach or ski/mountain locations.Most are closed during some of the winter months, although a few are closed during the summer.Supply numbers for industry segments will also be affected by seasonally closed hotels.No modeling takes place for seasonally closed hotels.
87 Sufficiency of Industry Data If an Industry segment has 4 or more hotels that submit actual data, then that segment is defined as “Sufficient”, similar to the comp set rule (3 required)The numbers for that industry segment can then appear on STAR reports and elsewhere. Industry data will not appear when the segment is insufficient.Multi-month numbers are considered to be sufficient if greater than 50% of the months or day included in the multi-month period are sufficient
88 “Consistent Sample” related to Industry Segment data If an industry segment has a non-reporting property (or a property that reports intermittently), that can possibly distort the performance numbers. Or a hotel that participates this year and not last year, or visa versa. Or hotels that open or close during the date range you are looking at.You never know if a change in performance is related to what is actually happening among the hotels in the industry segment or the fact that a single property’s data is missing(You can run a Trend report on a specific group of reporting hotels to analyze performance on a consistent sample.)
89 Leap Year MethodologyThe STR methodology for Leap Year assumes that February 29th never exists.If this methodology was not used, there would be an increase in Supply, Demand, and Revenue in Februarys during leap years.All raw February monthly data (property, comp set, and industry) for leap years is multiplied times 28/29 as if this month only had 28 days.Advanced concept
90 Full AvailabilityOccasionally a hotel in the industry segment may report a Supply number that is different than the number of rooms in the property times the days in the periodWhen calculating industry data, STR always uses the Supply number based upon full availability, not the number that the hotel reportsAdvanced concept
91 Questions Define an industry segment Demonstrate how KPIs and percent changes are calculated when it comes to industry segmentsBriefly explain how US industry data is “modeled”When will different types of industry data not appear on a STAR report?
93 What is meant by Corporate Data? Individual hotels receive STAR reports with data for their subject property compared to their comp set and relevant industry segmentsThe regional managers and the staff at corporate headquarters of these hotels are also very interested in this dataMost hotel companies receive volumes of corporate data. These could be chains, management companies, and ownership groups.
94 What do Companies Receive? Most corporate headquarters receive reports listing each of their hotels and the various performance metrics, referred to as “Index Reports”. These reports may be subtotaled by various fields (region, brand, operation)Some companies receive “Summary Reports” aggregating data for their hotels based upon various subtotal groups.In addition to reports, companies also receive data files, so they can analyze this data and merge it with internal information
95 Who do Companies Compare Their Hotels to? Most commonly, companies compare their hotels to the corresponding comp setsSometimes they compare their hotels to the corresponding industry segment of the subject property, such as a Market or Tract ScaleThey may compare total Brand numbers to the corresponding Scale total, or to a group of other brands, referred to as a “Corporate Comp Set”
96 Corporate Aggregations Hotels can be grouped based upon common fields such as Brand, Region, or Operation (Corporate versus Franchise)Hotels can also be grouped based upon user-defined variables, such as Sales Territories, Regional Managers, or Hotel TypesThe raw hotel and comp set data can be aggregated using various methods, i.e.: Standard Weighting or Portfolio Weighting
98 US versus WW Industry Segments In the US and in North America, probably the most popular industry segment to compare hotels to are Market Scale or Tract ScaleThe Scale category is totally related to chain hotelsOutside North America, since there are much less chain hotels, Class is used instead and the popular segments are Market Class and Tract Class
99 Non-Reporting Hotels and Industry Data The US is the only country where property data is modeled for non-reporting hotels. The numbers for Industry segments in the US are based on a combination of Actual and Modeled data.Outside the US, the numbers for Industry segments are solely based on Actual data of participating hotels. The methodology used to derive metrics for industry segments is exactly the same as for competitive sets. The Occupancy & ADR of participating hotels are used to estimate non-participating hotels.
100 WW Participation Issues In some areas of the world, STR participation is still growing and the number of hotels submitting data may be smallerWhen requesting data back in time, you need to check past participationThere may be enough hotels to pass sufficiency tests for recent months, but not back in timeAlso keep participation in mind when you are looking at year-over-year change to be sure it is not affected by new hotels starting to submit data
101 Currencies and Exchange Rates Outside the US, most hotels want to see their STAR reports in their local currencySTR obtains daily and monthly exchange rates for all currencies in the world (at least the countries that have hotels) from Oanda (www.oanda.com)Daily data is converted using the daily exchange rateMonthly data is converted using the daily exchange rate for the last day of the month
102 Exchange Rates and Multiple time periods It is important to understand how exchange rates are handled when it comes to multiple time periods for monthly data, i.e.: YTD and Running 3 or 12 month numbersRaw data is aggregated using the exchange rate for each individual month and then the KPIs are derived. This methodology accounts for changing exchange rates.Multiple time periods for daily data, i.e.: weekly or Running 28-day numbers are calculated the same way, using the exchange rate for each individual day
103 Currencies and Corporate Data When companies obtain data from STR, they may request the numbers in multiple currencies, i.e. US Dollars, Euros, and Local.Analyzing the performance of hotels in a company spread over multiple countries can sometimes be distorted by fluctuating exchange rates.STR produces some data and reports for companies in a “constant currency”. This methodology applies a single exchange rate i.e.: the rate from January of the current year to the numbers for every month.
105 Additional Issues/Topics Segmentation Data (Group, Transient, Contract)Additional Revenue Data (F&B, Other, Total)Data within a Hotel ReviewData within a Trend ReportData within a Destination Report
106 Segmentation DataSometimes hotels submit Group, Transient, and Contract numbers (Rooms Sold and Revenue) that may not add up to the totals for the month or day. Sometimes the diffferent data are coming from different systems. (STR checks and verifies the accuracy of this data.)STR uses the monthly or daily totals to revise the Segmentation data so that it matches perfectly.Separate percentages are determined for each segment for Demand and Revenue and then these percentages are applied to the monthly or daily totals.
107 Additional Revenue Data Some hotels submit extra Revenue numbers in addition to Room Revenue. They will always submit Food and Beverage (F&B) Revenue.They may submit either “Other” Revenue and/or Total Revenue. If they only submit one, STR will derive the other value.These numbers along with Segmentation (Group, Transient, and Contract) numbers all may appear on monthly or weekly STAR reports.
108 Hotel Reviews, Destination Reports & Trend Reports STR produces publications (known as Hotel Reviews), Destination Reports (primarily for CVBs) and Trend Reports (ad-hoc requests).These reports may display performance data for standard industry segments such as markets and tracts (sub- markets) which may include scale or class groups.US industry numbers that appear in these reports will typically include modeled data.Non-US industry numbers that appear in these reports will not include modeled data.