Hotel Industry Foundations and Introduction for the Philippines

Hotel Industry Foundations and Introduction for the Philippines
The SHARE Center Supporting Hotel-related Academic Research and Education

Table of Contents Introduction to the Players in the Hotel Industry - Affiliations Introduction to Geographic and Non-geographic Industry Categorizations Introduction to Benchmarking in the Hotel Industry Introduction to Hotel Math Introduction to Hotel Industry Reports

Note regarding Training Content
This PowerPoint contain a large number of slides. Material that is not critical for the “Hotel Industry Foundations and Introduction” certification exam is noted as “optional”. An instructor may or may not want to spend time covering optional content. Some instructors may want to spend additional time expanding on certain areas. Instructors are free to personalize the PowerPoint. Contact the SHARE Center if you have any questions or if we can help in any way.

Note regarding Application Exercises
There are Application Exercises that are suggested at the end of each section. These are valuable since they offer hands-on experience working with live hotel data. The raw data that relates to these exercises can be found in a spreadsheet titled “HIFI application exercises” that come with the training program. You can obtain similar raw data that is relevant to a market or country closer to your university. Contact the SHARE Center if you have any questions or if we can help in any way.

Part 1 – Introduction to the Players in the Hotel Industry – Affiliations

Multiple Affiliations for a Single Hotel
Chain Parent Company Management Company Owner Asset Management Company - optional

Chain The Chain represents the hotel brand, which is clearly displayed to the public on the building and in all interactions with the customer. STR uses Chain and Brand synonymously. There are hundreds of hotel chains throughout the world. In some cases, companies organize their hotels by different chains that may not be obvious to the consumer or traveler, for example: Hampton Inn vs. Hampton Inn & Suites Holiday Inn vs. Holiday Inn Express Best Western vs. Best Western Plus and Best Western Premier

Chain continued - optional
Hotels have evolved but in many aspects have remained the same. The first Holiday Inn – 1952 The newest Holiday Inn – 2014

Top Chains in the Philippines (by number of rooms) - optional
Properties Rooms Shangri-La Hotel 4 2,077 Tune Hotels 9 1,537 Eurotel Hotels 979 Holiday Inn 3 964 Microtel Inn & Suites by Wyndham 13 924 Marco Polo 890 Marriott 2 643 Sofitel Luxury Hotels 1 609 New World 598 Ascott 582 The Dusit Thani Group 538 The Peninsula Hotel 493 Days Hotels 5 479 Millennium Hotels 450 Quest Hotels 427 * This is a list of the top chains in a sample country. STR can provide this information for any country that you are interested in. As of October 2014

Top 25 Chains in Asia Pacific (by number of rooms) - optional
Properties Rooms 7 Days Inn 1,028 101,466 JinJiang Inns 803 99,217 Home Inn 828 95,858 GreenTree Inns 695 63,700 Toyoko Inn 242 46,709 Super 8 607 45,001 Sheraton Hotel 108 41,943 Crowne Plaza 116 37,938 Holiday Inn 124 35,920 Route Inn 213 33,477 Shangri-La Hotel 63 28,322 Hilton 72 27,511 Hanting 234 27,508 Novotel Hotels 25,925 InterContinental 66 24,452 Motel 168 121 23,548 Hotel ibis 122 23,266 Vienna Hotel 132 22,506 Best Western 250 17,805 Holiday Inn Express Hotel 61 15,451 Westin 46 15,226 Howard Johnson 45 14,849 Hyatt 14,561 Apa Hotel 14,518 Washington Hotel 54 14,333 As of October 2014

Top 25 Chains in the World (by number of rooms) - optional
Properties Rooms Holiday Inn Express Hotel 2,315 222,986 Holiday Inn 1,184 217,497 Hilton 557 199,076 Best Western 2,779 197,319 Marriott 494 177,438 Super 8 2,440 156,430 Sheraton Hotel 434 153,140 Courtyard 981 144,816 Days Inn 1,728 134,286 Hotel ibis 1,006 126,464 Hampton Inn 1,269 122,576 Comfort Inn 1,582 118,234 Quality Inn 1,399 115,545 Crowne Plaza 398 111,528 Motel 6 1,105 104,497 7 Days Inn 1,028 101,466 JinJiang Inns 803 99,217 DoubleTree 393 97,585 Home Inn 831 96,117 Best Western Plus 1,049 94,802 Ramada 723 90,371 Mercure Hotels 717 89,219 La Quinta Inns & Suites 854 85,425 Hilton Garden Inn 604 84,091 Hyatt 194 81,436 As of October 2014

Parent Company Parent companies consist of multiple chains. Some people may use the term “Group” as a synonym for Parent Company. Often the parent company will have a variety of different types of chains. There are sample tables provided for four parent companies. A parent company may have a range of high-end, middle, and low-end chains; or they may concentrate in one area. Parent companies may have hotels around the world or in specific regions.

Top Parent Companies in the Philippines (by number of rooms) - optional
ParentCompany Properties Rooms Shangri-La Hotels 5 2,389 Intercontinental Hotels Group 1,559 Tune Hotels 9 1,537 Wyndham Worldwide 19 1,517 Ascott Group 1,093 Eurotel Hotels 979 Marco Polo Group 3 890 Marriott International 2 643 Accor Company 1 609 New World Hotel Group 598 Carlson Hospitality Company 597 Best Western Company 6 591 Dusit Thani Public Company Ltd 538 The Peninsula Hotel 493 Millennium & Copthorne Global 450 As of October 2014

Top 25 Parent Companies in Asia Pacific (by number of rooms) - optional
Parent Company Properties Rooms Home Inns 971 124,107 Jinjiang International Holding 963 121,858 Intercontinental Hotels Group 378 115,795 Accor Company 558 110,750 Wyndham Worldwide 868 102,525 7 Days Inn 1,028 101,466 Starwood Hotels & Resorts 283 89,969 GreenTree Inns 695 63,700 Marriott International 162 51,956 Toyoko Inn 242 46,709 Hilton Worldwide 126 42,527 Huazhu Hotels Group 335 40,152 Route Inn 213 33,477 Shangri-La Hotels 76 33,185 Hyatt 87 29,946 Best Western Company 307 25,666 Vienna Hotel 132 22,506 Choice Hotels International 337 22,095 Prince Hotels & Resorts 49 16,797 Carlson Hospitality Company 100 15,548 Beijing Capital Tourism Co, Ltd 75 15,403 Washington Hotel Corporation 59 15,391 JAL Hotels Company 48 14,814 Apa Hotel 66 14,518 The Indian Hotel Company 116 13,822 As of October 2014

Top 25 Parent Companies in the World (by number of rooms) - optional
Parent Company Properties Rooms Hilton Worldwide 4,214 695,009 Marriott International 4,017 683,083 Intercontinental Hotels Group 4,669 674,577 Wyndham Worldwide 7,541 652,240 Choice Hotels International 6,383 507,666 Accor Company 3,498 462,203 Starwood Hotels & Resorts 1,186 345,145 Best Western Company 3,982 310,162 Carlson Hospitality Company 1,090 171,582 Hyatt 548 150,482 Home Inns 974 124,366 Jinjiang International Holding* 963 121,858 G6 Hospitality 1,185 113,011 7 Days Inn 1,028 101,466 Groupe du Louvre* 1,174 96,425 LQ Management LLC 854 85,425 Extended Stay Hotels 684 76,263 GreenTree Inns 695 63,700 Grupo Sol Melia 198 61,238 Whitbread Hotel Company 689 58,275 Vantage Hospitality 961 58,173 N H Hotels 370 56,857 Toyoko Inn 242 46,709 Fairmont Hotels 112 42,063 Riu Hotels & Resorts 105 41,439 As of October 2014 *JinJiang International Holdings is acquiring Groupe du Louvre

Operation: Corporate, Franchise or Independent
STR uses three different operation types: Corporate Franchise Independent A corporate hotel is a chain hotel owned and/or managed by the chain or the parent company. A franchise hotel is a chain hotel run by a third party where the chain receives some sort of franchise fee.

Operation: Corporate, Franchise or Independent continued
An independent hotel is not affiliated with a chain or parent company. Here are the number of properties and rooms in the Philippines and the world by each Operation Type: Operation Philippines Properties Philippines Rooms Worldwide Properties Worldwide Rooms Corporate 54 14,074 23,975 4,098,267 Franchise 27 2,705 39,016 3,971,136 Independent 255 30,295 101,427 7,239,761 As of October 2014

Independent Hotels Independent hotels are not affiliated with a specific chain. They may be managed or owned by companies listed on preceding pages. There are over 250 independent hotels in the Philippines in the STR database. There are over 100,000 independent hotels in the world in the STR database. Independent hotels vary considerably in size, price level, location, amenities and other attributes.

Chain Hotels versus Independents in China & WW Percentages based on Number of Rooms

Management Company A management company operates a hotel for another party. The company has a management contract where it receives payment and/or some portion of profits. Some chains or parent companies manage their own hotels. Management companies may manage a variety of different chains as well as independent hotels.

Philippine Management Companies (by number of rooms) - optional
Management Company Total Props Total Rooms Chain Props Chain Rooms Indep. Props Indep. Rooms Shangri-La Hotels and Resorts 5 2,389 5 InterContinental Hotels 4 1,211 Marco Polo 3 890 New World Hotels 1 598 Dusit Hotels & Resorts 538 CHM Hotels 512 1 Fairmont Hotels & Resorts 442 3 Archipelago International 427 Pan Pacific Hotels Group 236 Oakwood Asia Pacific 230 Eclipse Hotels & Resorts Int`l 213 Berjaya Hotels & Resorts 212 The Ascott Group 149 149 Frasers Hospitality 89 Amanresorts International Pte Ltd 40 As of October 2014

Top Asia Pacific Management Companies (by number of rooms) - optional
Management Company Total Props Total Rooms Chain Props Chain Rooms Indep. Props Indep. Rooms Jinjiang Inn Co., Ltd. 881 105,263 4 1,115 Starwood Hotels & Resorts 228 73,564 InterContinental Hotels 197 63,080 196 62,853 1 227 Hilton Managed 107 35,731 106 35,633 98 Shangri-La Hotels and Resorts 72 32,025 Merrylin Holding Ltd 142 28,388 140 27,907 2 481 Jin Jiang Int'l Hotels Mgmt Co. Ltd. 94 23,625 67 14,257 27 9,368 Vienna Hotel Group 131 22,048 BTG-Jianguo Hotels & Resorts 52 14,162 48 12,949 1,213 JAL Hotels Company 44 13,208 Fujita Kanko Group 42 10,695 7,843 15 2,852 Tokyu Group Hotels & Resorts 10,415 40 10,128 287 Hankyu Hanshin Hotels 10,164 30 7,079 22 3,085 Archipelago International 74 9,886 71 9,578 3 308 Jinling Hotels 36 9,616 35 9,437 179 CTS HK Metropark Hotels 9,255 8,647 5 608 New Century Int`l Hotel Mgmt 28 9,156 23 1,313 Toga Far East Hotels 58 8,233 Huazhu Hotels Group 56 7,781 Solare Hotels & Resorts 47 7,540 46 7,413 127 Frasers Hospitality 7,101 26 5,196 9 1,905 Zhejiang Narada Hospitality Service 6,973 18 4,300 2,673 H N A Internationl Hotels & Re 31 6,856 5,735 1,121 Okura Hotels & Resorts 21 6,686 19 5,794 892 Swiss Belhotel Int'l. 43 6,233 Dorsett Hospitality International 20 6,047 5,762 285 As of October 2014 Management companies with 6,000 rooms or more; both chain and non-chain managed

Top Global Management Companies (by number of rooms) - optional
Management Company Total Props Total Rooms Chain Props Chain Rooms Indep. Props Indep. Rooms MGM Resorts 19 48,357 Interstate Hotels 147 42,222 114 34,723 33 7,499 Caesars Entertainment 41,361 2 2,861 31 38,500 Crossroads 226 29,373 218 27,804 8 1,569 Merrylin Holding Ltd 142 28,388 140 27,907 481 White Lodging 162 25,976 Vienna Hotel Group 131 22,048 Pillar Hotels & Resorts 21,791 225 21,642 1 149 Aimbridge Hospitality 100 21,296 92 19,026 2,270 Louvre Hotels 326 21,096 Highgate Hotels 36 19,599 16 7,225 20 12,374 Remington Hotels 81 16,075 71 14,681 10 1,394 Crescent Hotels & Resorts 15,956 64 14,006 7 1,950 The Procaccianti Group 53 15,107 51 14,975 132 Westmont Canada 121 14,533 119 14,181 352 Hersha Hospitality Management 109 14,038 96 12,649 13 1,389 Ocean Properties, Ltd 13,918 61 10,639 3,279 TMI Hospitality 184 13,198 183 13,147 GF Management 85 12,285 72 10,368 1,917 Sage Hospitality 65 12,093 11,361 4 732 Atlantica Hotel International 12,082 74 10,513 11 Davidson Hotels & Resorts 39 11,891 38 11,837 54 Destination 40 11,121 5 1,214 35 9,907 Columbia Sussex 34 11,094 Concord Hospitality 76 11,020 TOP International Hotels 94 10,825 83 9,899 926 Fujita Kanko Group 42 10,695 27 7,843 15 2,852 John Q Hammons 43 10,545 41 10,066 479 Management companies with 10,000 rooms or more; no chain managed As of October 2014

Owner Companies There are many companies that own multiple hotels.
There are six owner companies in the Philippines with 500 rooms or more. There are 46 owner companies worldwide with 10,000 rooms or more. Some chains or parent companies own their own hotels. Owners may own hotels from a variety of different chains .

Philippine Owner Companies (by number of rooms) - optional
Owner Company Total Props Total Rooms Chain Props Chain Rooms Indep. Props Indep. Rooms Shangri-La Hotels and Resorts 5 2,389 5 Waterfront Philippines, Inc 1,328 Red Planet Hotels 4 695 4 New World Hospitality 1 598 Dusit Hotels & Resorts 538 The Ascott Group 2 509 The Peninsula Hotels 493 Berjaya Hotels & Resorts 212 Frasers Hospitality 89 Amanresorts International Pte Ltd 40 As of October 2014

Top Asia Pacific Owner Companies (by number of rooms) - optional
Owner Company Total Props Total Rooms Chain Props Chain Rooms Indep. Props Indep. Rooms Shangri-La Hotels and Resorts 69 30,859 Prince Hotels 44 15,726 Apa Hotel Mgtco 65 13,973 Hilton 29 12,716 Greens Co., Ltd 75 10,917 51 8,365 24 2,552 Las Vegas Sands Corporation 6 7,975 3 2,220 5,755 Solare Hotels & Resorts 50 7,902 49 7,831 1 71 The Ascott Group 41 7,255 38 6,863 392 Okura Hotels & Resorts 20 6,366 18 5,474 2 892 Richmond Hotels 33 6,345 31 6,090 255 Kintetsu 6,029 14 4,831 1,198 Pan Pacific Hotels Group 15 5,697 Tourism Asset Holdings Limite 39 5,589 32 5,165 7 424 Kempinski Hotels & Resorts 5,554 Far East Consortium Int`l Lim 19 5,500 5,215 285 Fortress Real Estate (Asia) GK 42 5,426 Accor Australia New Zealand Hospitality 4,956 37 4,782 174 Rydges Hotels & Resorts 28 4,875 26 4,716 159 JR Kyushu 4,816 4,522 294 Grand Hotels International 22 4,580 Far East Hotels 4,207 640 3,567 Erawan Group 16 4,092 New World Hospitality 10 3,932 9 3,648 284 Centara Hotels & Resorts 3,925 Sunroute Hotel 3,894 Regal Hotels International Limited 3,890 Mori Trust 17 3,759 5 1,909 12 1,850 Oberoi Hotels & Resorts 3,655 3,557 98 ITC 3,615 As of October 2014 Owners with 3,500 rooms or more; both chain and non-chain managed

Top Global Owner Companies (by number of rooms) - optional
Owner Company Total Props Total Rooms Chain Props Chain Rooms Indep. Props Indep. Rooms Host Hotels & Resorts 138 68,527 136 68,149 2 378 MGM Resorts 18 47,682 Hospitality Properties Trust 291 43,293 Caesars Entertainment 29 38,108 2,861 27 35,247 Archon Hospitality 32,317 Ashford Hospitality Trust 128 29,490 120 28,220 8 1,270 R L J Lodging Trust 146 23,162 Pandox 106 22,273 98 20,069 2,204 Xenia Hotels & Resorts 97 19,632 Louvre Hotels 216 16,395 FelCor Lodging Trust 52 15,811 49 15,196 3 615 Las Vegas Sands Corporation 9 15,392 Fattal Hotels 81 15,260 71 12,864 10 2,396 Sunstone Hotel Investors 30 14,300 13,246 1 1,054 InnVest Reit 113 14,178 112 13,938 240 Tsogo Sun 91 14,157 86 13,595 5 562 Apa Hotel Mgtco 65 13,973 Fiesta Hotel Company 48 13,937 47 13,925 12 Moor Park Capital Partners 13,348 96 13,203 145 JER Partners 150 13,025 149 12,986 39 TMI Hospitality 182 12,956 181 12,905 51 Summit Hotel Properties 92 11,767 Apple REIT Nine 89 11,371 LaSalle Hotel Properties 46 11,140 7,292 19 3,848 DiamondRock Hospitality Comp 11,100 26 10,994 Grand City Hotels & Resorts 11,052 9,587 15 1,465 The Ascott Group 10,976 67 10,354 4 622 Greens Co., Ltd 75 10,917 8,365 24 2,552 Atrium 44 10,894 42 10,415 479 Grupo de Turismo Gaviota SA 28 10,365 5,551 20 4,814 Highgate Hotels 14 10,027 3,550 6 6,477 Owners with 10,000 rooms or more; no chain owners As of October 2014

Hilton Worldwide owned and managed Owned and managed by Archon Hospitality Owned by Felcor and Managed by Aimbridge Hospitality

Asset Management Company - optional
An Asset Management Company represents the owner in the operation of a hotel. A hotel may have both a Management Company and an Asset Management Company.

New “Quasi Chains” or “Soft Brands” - optional
In recent years, several new chains have come into existence that some would say are really a cross between a chain and a marketing group for independent hotels. These chains have been created to be able to bring hotels under a Parent Company flag. The hotels can take advantage of the benefits available from the Parent Company. The following chains might be considered to be examples of this new phenomenon: Autograph by Marriott Luxury Collection by Starwood Andaz by Hyatt Ascend by Choice

Quiz Questions 1) Most of the entities below are classified as “Chains”. Which one is a “Parent Company” consisting of multiple chains? Hampton Inn Courtyard Starwood Hotels & Resorts Holiday Inn Express 2) Which is a true statement about Parent Companies? Parent Companies and the related chains have changed over time Parent Companies must consist of no more than five chains Parent Companies can only consist of chains in a single Scale Parent Companies can only have hotels in a single country 3) What are the three different operation types? Corporate, Managed, Independent Managed, Franchise, Independent Managed, Clustered, Independent Corporate, Franchise, Independent

Quiz Questions continued
4) Which is a true statement about independent hotels? Independent hotels are not affiliated with a specific chain Chain hotels outnumber independent hotels in every country of the world Independent hotels are mostly Luxury Class hotels in Urban Locations with more than 150 rooms Independent hotels may never be managed by an outside entity 5) Which is a true statement about Management Companies? Management companies have contracts where they receive payment for their services and/or some portion of profits Management companies may manage only one chain Management companies will always own the hotels they manage Management companies serve the exact same role as asset management companies

Introduction to the Application Exercises
There are sample Application Exercises at the end of each section. Instructors can utilize these however they wish. Instructors can select one exercise or use them all. The instructor can demonstrate one or more examples for each application exercises in class to make sure that students understand the steps. Instructors can have the students complete specific exercises. Students can work in groups or by themselves.

Application 1 – Different types of players?
Find a recent article about a hotel company. (You can check HotelNewsNow.com or another hotel-related electronic news service or the internet.) What type of hotel industry “player” is the company that you have chosen (chain, parent company, management company, owner or asset management company)? Find other articles about other companies. Try to find different types of players. Are there companies or organizations that you find that are not one of the five major types of affiliations?

Application 2 – More about the players?
Select a specific hotel industry player (chain, parent company, management company, owner or asset management company) or another “player” in the hotel industry (association, tourism organization, developer, consultant, Wall Street firm). What can you find about the current goals, company philosophy, number of hotels, number of staff, corporate locations and history of this organization. See if you can find articles (HotelNewsNow.com or similar) with quotes from company representatives. See if you can find out anything about the potential career- related opportunities that this company might offer.

Application 3 – Chain versus independent hotels in countries around the world
Select a specific country somewhere in the world. Obtain the STR Property and Room Count data for your country (by Chain and Parent Company). Determine the number of Chain versus Independent hotels in your country and calculate the percentages based upon number of rooms. Determine the top chains in your country by number of rooms. Determine the top parent companies in your country.

Part 2 – Introduction to Geographic and Non-geographic Industry Categorizations

Major Geographic Categories
The major geographic categories are: World Continent Sub-Continent Country Market Submarket or Tract

Continents and Sub-Continents
STR defines these related to the hotel industry. (Little different from the traditional seven continents.) There are 4 continents: Americas, Asia Pacific, Europe and Mideast/Africa. Each continent includes three to four sub-continents. The STR definitions roughly correspond to the UNWTO definitions when it comes to which countries are included in each continent and sub-continent.

Americas – optional* Caribbean Central America Anguilla Belize Antigua & Barbuda Costa Rica Aruba El Salvador Bahamas Guatemala Barbados Honduras Bermuda Nicaragua British Virgin Islands Panama Cayman Islands Cuba North America Dominica Canada Dominican Republic Mexico Grenada Greenland Guadeloupe United States Haiti Jamaica South America Martinique Argentina Montserrat Bolivia Netherlands Antilles Brazil Puerto Rico Chile St. Kitts & Nevis Colombia St. Lucia Ecuador St. Vincent Falkland Islands Trinidad & Tobago French Guiana Turks & Caicos Guyana US Virgin Islands Paraguay Peru Suriname Uruguay Venezuela * Countries and subcontinents provided for general perspective (no need to memorize)

Asia Pacific - optional
Central & South Asia Australia & Oceania Bangladesh American Samoa Bhutan Australia India Cook Islands Maldives Fiji Nepal French Polynesia Pakistan Guam Sri Lanka Kiribati Marshall Islands Northeastern Asia Micronesia China Nauru Japan New Caledonia North Korea New Zealand South Korea Niue Mongolia Northern Mariana Islands Taiwan Palau Papua New Guinea Southeastern Asia Samoa Brunei Solomon Islands Cambodia Tonga East Timor Tuvalu Indonesia Vanuatu Laos Malaysia Myanmar Philippines Singapore Thailand Vietnam

Europe - optional Note that Israel is in Southern Europe.
Eastern Europe Southern Europe Western Europe Armenia Albania Austria Azerbaijan Andorra Belgium Belarus Bosnia and Herzegovina France Bulgaria Croatia Germany Czech Republic Cyprus Liechtenstein Georgia Gibraltar Luxembourg Hungary Greece Monaco Kazakhstan Italy Netherlands Kyrgyzstan Israel Switzerland Poland Macedonia Moldova Malta Romania Montenegro Russia Portugal Slovakia San Marino Tajikistan Serbia Turkmenistan Slovenia Ukraine Spain Uzbekistan Turkey Northern Europe Denmark Estonia Finland Iceland Ireland Latvia Lithuania Norway Sweden United Kingdom Note that Israel is in Southern Europe.

Mideast Africa - optional
Middle East Southern Africa (cont.) Afghanistan Cape Verde Bahrain Central African Republic Iran Comoros Iraq Congo Jordan Cote d'Ivoire Kuwait Democratic Rep. of Congo Lebanon Equatorial Guinea Oman Ethiopia Qatar Gabon Saudi Arabia Gambia Syria Ghana UAE Guinea Yemen Guinea-Bissau Kenya Northern Africa Lesotho Algeria Liberia Burkina Faso Madagascar Chad Malawi Djibouti Mauritius Egypt Mozambique Eritrea Namibia Libya Nigeria Mali Reunion Morocco Rwanda Mauritania Sao Tome and Principe Niger Senegal Sudan Seychelles Tunisia Sierra Leone Somalia Southern Africa South Africa Angola Swaziland Benin Tanzania Botswana Togo Burundi Uganda Cameroon Zambia Zimbabwe Mideast Africa - optional

Global Hotels by Continent and Sub-Continent - optional
Properties Rooms Americas Caribbean 1,861 222,580 Central America 913 57,340 North America 64,285 5,747,254 South America 3,435 360,278 Asia Pacific Australia & Oceania 5,224 312,230 Central & South Asia 3,722 251,057 Northeastern Asia 14,680 2,498,819 Southeastern Asia 5,389 680,157 Europe Eastern Europe 4,662 423,187 Northern Europe 12,510 870,004 Southern Europe 18,113 1,713,345 Western Europe 24,267 1,432,590 Middle East & Africa Middle East 1,471 253,797 Northern Africa 1,458 303,321 Southern Africa 2,428 183,205 TOTAL WORLD 164,418 15,309,164 As of October 2014 A complete list of countries with prop & room counts is available.

Countries STR uses the UNWTO definition when it comes to recognizing countries. There are over 200 countries with one or more hotels. There are over 40 countries with 50,000 rooms or more.

Top Countries in the World (by number of rooms) - optional
Country Properties Rooms Room Revenue United States 53,242 4,964,356 $130,699,814,694 China 11,083 1,859,380 $40,874,743,247 Germany 9,592 586,946 $18,724,960,459 Spain 4,728 585,049 $17,683,105,944 United Kingdom 8,405 531,520 $20,413,638,941 Japan 2,997 526,337 $19,160,859,919 France 7,699 472,173 $26,016,960,319 Canada 7,613 434,789 $11,769,676,152 Italy 6,677 376,530 $14,627,587,117 Mexico 3,426 347,819 $9,613,668,025 Turkey 1,566 246,720 $7,956,809,141 Australia 4,143 244,407 $10,964,803,968 India 3,323 214,360 $4,213,187,677 Indonesia 2,345 211,324 $4,336,893,978 Brazil 1,622 210,485 $6,237,500,726 Greece 1,922 170,993 $5,559,845,325 Thailand 1,118 170,271 $4,434,514,519 Egypt 609 158,907 $1,840,957,573 Malaysia 552 121,148 $3,420,950,261 Portugal 1,368 115,766 $2,954,360,956 United Arab Emirates 551 110,102 $6,144,195,588 Netherlands 1,987 107,781 $3,691,155,187 Switzerland 2,382 106,580 $6,415,099,380 Russia 707 102,830 $2,740,010,122 Austria 1,685 101,683 $3,364,213,464 Room Revenue – 12 Month Ending October 2014

Markets Market is one of the most important geographic categories below Country, especially for a hotel General Manager. Markets are created based upon the number of hotels in an area and the participation. Markets are commonly thought of as cities (metro markets), although they are also used to represent more rural areas outside of the major cities (non-metro markets). In some countries, there may be a large number of markets. In other countries, especially developing areas, there may be just a small number of markets.

Sample Markets in the U. S
Sample Markets in the U.S. State of Tennessee (the logic is similar everywhere in the world) For example, in the state of Tennessee, there are four metro markets: Memphis Nashville Knoxville Chattanooga And one non-metro market for everywhere else – Tennessee Area.

Worldwide Markets Countries contain varying numbers of markets. Markets are based upon the number of hotels and the participation. Smaller countries may consist of just a single market. Countries that are slightly larger may consist of a market for the major city and then a second market for all of the other hotels, named something like “Country Name Area”. Countries that are larger may consist of markets for several major cities and then an additional market for all other hotels. Larger countries will have many markets. Countries like the U.S. have over one hundred. No market will ever cross country boundaries.

Examples of Markets in Select Countries - optional
Canada* United Kingdom China Atlantic Provinces Greater London Beijing Montreal Southeast England Shanghai Quebec Southwest England North China excluding Tianjin Toronto East England East China excluding Hangzhou Ontario East East Midlands Northeast China Ontario Southwest West Midlands South Central China Ontario North Northwest England Hong Kong SAR Ontario Central Yorkshire & Humberside Western China Saskatchewan/Manitoba Northeast England Hainan Alberta Scotland Hangzhou Vancouver Wales Shenzhen British Columbia Other Northern Ireland Tianjin Northern Canada Henan Guangzhou Sanya *Aligned with “Statistics Canada”

Canada

United Kingdom

U.S. Markets (sample country) - optional
STR uses internal 6-digit market numbers

Top 35 WW Metro Markets (based on number of rooms) - optional
Properties Rooms Participation* Beijing, China 1,275 219,188 37% Shanghai, China 1,246 212,969 Las Vegas, USA 379 171,065 16% London, United Kingdom 1,322 123,007 68% Orlando, USA 481 121,187 62% New York, USA 623 112,816 85% Chicago, USA 729 109,743 89% Washington DC, USA 691 107,161 95% Tokyo, Japan 448 99,147 41% Los Angeles/Long Beach, USA 992 97,863 77% Atlanta, USA 790 93,911 83% Guangzhou, China 476 82,270 26% Dallas, USA 626 78,695 81% Houston, USA 786 76,106 Bangkok, Thailand 346 75,005 45% Dubai, United Arab Emirates 351 70,343 72% Paris, France 1,047 67,384 22% Shenzhen, China 365 67,083 35% Hong Kong, China 207 65,272 52% Berlin, Germany 636 64,273 55% Sao Paulo, Brazil 437 61,606 42% Phoenix, USA 445 61,168 87% San Diego, USA 473 59,645 Hangzhou, China 58,447 30% Singapore, Singapore 251 57,168 64% Anaheim/Santa Ana, USA 432 54,753 80% San Francisco/San Mateo, USA 396 51,421 84% Boston, USA 355 51,115 92% Miami/Hialeah, USA 382 49,086 Barcelona, Spain 521 48,675 40% Quebec, Canada 1,198 48,346 Madrid, Spain 391 48,231 49% Philadelphia, USA 381 46,272 Jakarta, Indonesia 272 46,026 Tampa/St Petersburg, USA 452 45,035 75% * Participation refers to hotels that submit performance data to STR, based upon number of rooms. This varies on a market-by-market basis. As of October 2014

Submarket or Tract A Submarket is a geographic subset of a Market.
The term “Submarket” is used outside of North America, while the term “Tract” is used in North America. Submarkets, like Markets are affected by hotel participation. They are reviewed annually to determine if new submarkets may be created based on growth in available supply and sample. The Submarket category, like the Market category is very important, especially for hotel GMs. Hotel data is often displayed at the Market and Submarket level.

Submarkets – More Info Submarkets are geographic sub-divisions of a market. There may be anywhere from two to ten or more submarkets in a market. In a metro market, there is usually a submarket for the CBD (Central Business District). There may be other submarkets in a city identified such as North/South/East/West, or Airport/Beach, or they may have names for suburban neighborhoods. In non-metro (rural) markets, a submarket may represent a small city.

Sample Submarkets in the State of Tennessee (logic similar everywhere)
In the state of Tennessee here are the Submarkets in each Market: Memphis: Memphis CBD, Memphis Airport/South, Memphis East, Memphis West (4) Nashville: Nashville CBD, Nashville Airport, Nashville I-65 North, I-24/Murfreesboro, Brentwood/Franklin, Nashville Other Areas (6) Knoxville: Knoxville, Knoxville Area, Gatlinburg/Pigeon Forge (3) Chattanooga: Chattanooga, Chattanooga Area (2) Tennessee Area: Bristol/Kingsport, Clarksville, East, Central, West Area (5)

Philippine Submarkets (sample country)
Properties Rooms Occupancy ADR* Room Revenue** Regional Philippines 140 11,686 62.5% 5,407.60 14,263,151,377 Manila 131 26,342 67.2% 5,578.60 35,606,721,861 Cebu Metro 59 8,727 67.6% 4,923.20 10,600,091,057 Occ , ADR & Room Revenue - 12 Month Ending October 2014 *Note the average ADR differences. **ADR and Room Revenue in Pesos

Revisions to Markets and Submarkets
STR makes small revisions to markets and submarkets on a regular basis. The changes are based upon: Supply (new hotels opening) Participation (new hotels submitting performance data) Client feedback Most revisions are made at the end of the year, after December STAR Reports and before January STAR Reports. A smaller amount of changes, related to increased participation, are made in July at the half year point. Companies are notified of these changes.

Non-Geographic Categories
In addition to geographic categories such as Market and Submarket, the hotel industry uses additional categorizations that are not related to geography. The two most important non-geographic categories for someone like a general manager are: Scale Class

Scale The Scale category is one of the most popular ways the industry looks at different hotels. There are seven Scale categories, six for chain hotels ranging from Luxury to Economy, and one Scale category for all Independent hotels. Check the average ADRs of the different scale groups on the next two slides. Note that in the Philippines they will range from Luxury (with an average over 7,400 pesos) down to Economy (with an average close to 3,000 pesos). The average ADR of the Independent Scale group (independent hotels) in the Philippines is close to 5,600 pesos.

Philippine Scales (sample country)
Properties Rooms Occupancy ADR* Room Revenue** Luxury Chains 12 4,205 68.7% 7,846.50 8,989,231,159 Upper Upscale Chains 9 2,957 71.8% 5,371.40 4,161,149,261 Upscale Chains 8 2,669 64.9% 5,211.30 3,154,922,270 Upper Midscale Chains 15 2,876 66.5% 3,598.00 2,385,049,692 Midscale Chains 14 1,391 59.7% 2,120.00 646,263,492 Economy Chains 22 2,461 67.1% 2,934.90 1,528,924,173 Independents 250 30,196 66.6% 5,586.10 40,674,245,267 Occ , ADR & Room Revenue - 12 Month Ending October 2014 *Note the average ADR differences. **ADR and Room Revenue in Pesos

Global Scales Scale Properties Rooms Occupancy ADR** Room Revenue**
Luxury Chains 1,891 497,816 66.5% $282.10 $33.6B Upper Upscale Chains 4,843 1,312,514 70.1% $165.01 $54.9B Upscale Chains 10,893 1,821,846 69.9% $124.24 $56.8B Upper Midscale Chains 14,705 1,680,230 66.0% $101.80 $40.7B Midscale Chains 11,550 1,105,056 60.9% $78.75 $19.3B Economy Chains 19,027 1,642,381 62.2% $56.05 $20.7B Independents 100,924 7,216,157 61.5% $123.93 $19.9B Occ , ADR & Room Revenue - 12 Month Ending October 2014 **ADR and Room Revenue is in US dollars

Scales and Consistency
When a chain is categorized in a specific Scale group, that means every hotel in that chain is in that Scale group everywhere in the world, in every country and market. For example, the Ritz-Carlton chain is in the Luxury Scale group. That means every Ritz-Carlton hotel in the world will be a Luxury Scale hotel. For a second example, the Holiday Inn chain is in the Upper Midscale group. That means every Holiday Inn will always be an Upper Midscale hotel, even though in some parts of the world a single Holiday Inn might be much nicer than a typical Upper Midscale hotel.

How do Chains get grouped into Scales?
Chains are positioned in Scale groups based upon ADR, not upon subjective criteria such as features or amenities. At the beginning of every year, STR subtotals all the hotels in the world by chain and calculates the average ADR per chain based upon the annual data for the prior year. Chains are sorted by the ADR amount from high to low. Breakpoints are determined between the different Scale groups. These breakpoints may move up and down slightly from year to year. Sometimes a chain will move up or down to the next higher or lower Scale group.

Which Chains are currently in which Scale groups?
There are lists that follow that show which Chains are in which Scale groups. It is possible to obtain a similar list for a specific country or another area of the world. It is important to have a general perspective of which chains are in which Scale groups. No need to memorize.

Global Luxury Chains (with 25 or more properties sorted by room count) – optional
Rooms InterContinental 178 60,191 Shangri-La Hotel 70 29,281 Sofitel Luxury Hotels 114 28,248 Fairmont 69 28,010 JW Marriott 65 27,785 Ritz-Carlton 85 24,882 Grand Hyatt 41 22,202 Four Seasons 92 20,098 Kempinski Hotels 73 19,918 Luxury Collection 16,793 W Hotel 45 12,996 Conrad 26 8,381 Mandarin Oriental Hotel Group 28 8,162 Daiwa Royal Hotels 7,013 St Regis 30 6,584 Park Hyatt 33 6,567 Taj Group 5,863 Hipotels 27 5,282 Anantara 31 3,590 Orient Express 3,202 Amanresorts International Pte Ltd 815 As of Year-End 2013

Global Upper Upscale Chains (with 25 or more properties sorted by room count) - optional
Rooms Hilton 554 195,410 Kimpton 59 10,966 Marriott 488 174,764 Delta Hotels 39 10,119 Sheraton Hotel 435 153,911 Steigenberger Hotels 49 9,227 Hyatt 190 81,226 Sonesta Hotel 34 8,305 Westin 198 76,279 Rotana 27 7,428 Radisson Blu 260 60,910 Pestana 46 6,838 Renaissance 154 51,950 Frasers Hospitality 43 6,823 Embassy Suites 215 51,707 Southern Sun - Sun Hotels 6,409 Wyndham Hotels 99 27,923 MGallery Hotel Collection 51 5,311 Le Meridien 98 27,152 Sun International 28 4,832 Pullman 80 23,653 Exclusive Hotels 120 4,613 Omni 50 20,192 Hoteis Othon 30 4,340 Millennium Hotels 48 16,483 Joie De Vivre 3,883 Hotel Nikko 13,537 Vivanta by Taj 3,844 Autograph Collection 54 11,320 Marriott Executive Apartments 26 3,641 Swissotel 11,285 Serena Hotels 33 2,846 As of Year-End 2013

Global Upscale Chains (with 25 or more properties sorted by room count) – optional
Rooms Courtyard 953 140,537 AC Hotels by Marriott 77 8,656 Crowne Plaza 389 108,367 Quest Serviced Apartments 155 8,616 DoubleTree 366 92,447 Hyatt House 58 8,155 Mercure Hotels 696 86,311 Park Plaza 38 8,149 Hilton Garden Inn 581 79,878 Hotel Husa 74 8,033 Residence Inn 652 79,243 Dorint Hotels & Resorts 41 7,323 Novotel Hotels 408 76,891 Grand Mercure 7,222 N H Hotels 321 49,436 Copthorne Hotels 34 7,072 RIU Hotel 100 40,355 Eurostars Hotel 64 6,798 Homewood Suites 333 36,778 Hesperia Hoteles 6,533 Springhill Suites 308 36,172 Thistle Hotels 33 6,475 Radisson 168 34,867 First 50 6,219 Disney Hotels 30 32,863 Hotel Indigo 55 6,200 Four Points 180 32,519 Swiss-Belhotel International 43 6,115 Scandic Hotel 150 29,099 Paradores 92 5,934 Melia 88 28,179 Oaks Hotels & Resorts 5,899 Iberostar Hotels & Resorts 84 27,852 Austria Trend Hotels & Resorts 29 5,132 Hyatt Place 192 25,572 Silken Hoteles 4,874 Staybridge Suites 196 21,518 Outrigger 26 4,863 Club Med 72 21,407 Lindner Hotels, Inc 31 4,774 Moevenpick 73 18,948 Clarion Collection 45 4,226 Best Western Premier 159 18,488 Macdonald Hotels 44 3,852 Prince Hotels 15,902 Coast Hotels & Resorts Canada 27 3,530 Maritim 49 14,906 Hampshire 51 3,130 aloft Hotels 79 13,425 abba 25 3,032 Apa Hotel 61 13,308 Adina 2,930 BTG-Jianguo Hotels & Resorts 12,390 OREA Hotel 2,775 Ascend Collection 118 11,283 Hoteles Estelar 2,335 Rica Hotels 11,092 Peppers Hotels 28 2,163 Jin Jiang Hotel 39 Three Cities Hotel Group 35 2,117 H10 Hotels 10,902 Oxford Hotels & Inns 1,651 Thon Hotels 9,854 EuroAgentur Hotel 1,537 Jinling 37 9,713 Hampshire Classic 957 Sokos Hotel 9,278 As of Year-End 2013

Holiday Inn Express Hotel 2,256 214,246 Iberotel Hotels 27 8,047
Global Upper Midscale Chains (with 25 or more properties sorted by room count) - optional Chain Properties Rooms Holiday Inn 1,188 217,910 Wyndham Garden Hotel 61 8,550 Holiday Inn Express Hotel 2,256 214,246 Iberotel Hotels 27 8,047 Comfort Inn 1,619 121,672 Tulip Inn Hotel 85 7,905 Hampton Inn 1,254 120,159 Citadines 59 7,551 Best Western Plus 1,116 100,164 Jurys Inns 32 7,530 Hampton Inn & Suites 684 70,583 City Express 63 7,336 Fairfield Inn 710 65,107 Mantra 54 7,314 Comfort Suites 606 47,515 Somerset Hotels 40 7,211 Clarion 278 40,661 Ringhotels 122 6,923 Country Inn & Suites 475 38,220 Adagio City Aparthotel 58 6,832 Park Inn 130 24,771 Rydges Hotels & Resorts 36 6,742 Golden Tulip 173 24,149 Sandman Hotels & Inns 43 6,417 Ramada Plaza 101 23,993 Richmond Hotels 31 6,090 Quality 212 23,569 G S M Hoteles 37 5,227 Barcelo Hotels 70 22,818 TOP International Hotel 4,906 TownePlace Suites 224 22,182 FX Hotels Group 39 4,722 Comfort 205 20,167 Hunguest 25 4,274 Tryp by Wyndham 109 15,299 Xanterra Parks & Resorts 4,188 Washington Hotel 14,333 Lexington 29 3,542 Drury Inn & Suites 74 11,445 Cumulus 3,537 Days Hotels 68 10,968 TOP City & CountryLine 3,464 Sunroute 66 10,329 Village Urban Resorts 3,103 Van der Valk Hotels 77 9,965 Home2 Suites by Hilton 2,928 Protea Hotel 9,658 Bastion Hotels 2,855 Leonardo Hotels 50 8,691 Sweden Hotels 57 2,589 As of Year-End 2013

Global Midscale Chains (with 25 or more properties sorted by room count) - optional
Rooms Best Western 2,783 198,068 Catalonia 50 7,541 Hotel ibis 970 120,801 Dormy Inn 43 7,064 Quality Inn 1,364 113,730 InterCityHotel 35 6,049 Ramada 728 89,795 Aston International 38 5,982 La Quinta Inns & Suites 833 83,612 Grupotel 34 5,435 Howard Johnson 242 29,858 Villages Hotel 63 4,729 Candlewood Suites 311 29,695 Sercotel Hotels 57 4,467 Sleep Inn 394 28,815 Shilo Inn 3,809 Baymont Inn & Suites 330 27,216 TREFF Hotels 41 3,738 Campanile Hotel 392 25,891 MainStay Suites 45 3,549 Sol 64 22,173 Chisun Inn 31 3,541 Vienna Hotel 104 17,898 Vagabond Inn 40 2,905 ibis styles 168 16,159 Kibbutz Hotels 32 2,861 Wingate by Wyndham 160 14,643 ACHAT Hotels 26 2,807 Kyriad 224 12,923 Fletcher Hotels 60 2,725 AmericInn 201 11,725 Oak Tree Inn 30 2,210 Super Hotel 99 11,307 BreakFree Resort 1,930 Red Lion 53 9,220 Sarovar Portico 29 1,877 Hawthorn Suites by Wyndham 92 9,205 P`tit Dej Hotel 37 1,397 Fiesta Inn 59 8,527 WelcomHeritage 916 Daiwa Roynet Hotels 36 7,935 As of Year-End 2013

Global Economy Chains (with 25 or more properties sorted by room count) – optional
Rooms Super 8 2,352 150,181 B&B Hotels 178 13,910 Days Inn 1,761 137,385 Motel One 46 10,245 Motel 6 1,081 102,589 Best Hotels 44 9,070 Home Inn 810 92,944 Studio 6 76 8,187 JinJiang Inns 718 89,877 Suburban Extended Stay Hotels 65 7,327 Extended Stay America 640 70,595 Balladins 130 7,284 Premier Inn 677 55,872 JI Hotels 54 7,243 Econo Lodge 917 54,773 Red Carpet Inns 120 6,472 Americas Best Value Inn 888 52,557 Budget Host 152 5,811 Toyoko Inn 241 46,622 Crossland Suites 43 5,584 7 Days Inn 406 42,749 America`s Best Inns 94 5,536 ibis budget 432 41,231 GuestHouse Inns 69 5,356 Travelodge, UK 510 38,177 Tune Hotels 33 5,152 Red Roof Inn 360 37,080 Bestay Hotel Express 4,938 Travelodge 435 32,503 Hotel Formule 1 4,900 Hanting 227 26,720 Country Hearth Inn 75 4,802 Rodeway Inn 443 25,221 Scottish Inns 116 4,461 Knights Inn 386 23,640 Starway 31 3,408 Motel 168 23,536 Sun Suites Hotels 25 3,254 Microtel Inn & Suites by Wyndham 313 22,379 Ginger Hotels 29 2,812 Value Place 185 22,093 Shindom Inn 26 2,344 GreenTree Inns 172 18,611 Old English Inn 56 1,510 InTown Suites 138 17,974 Hotel Climat 1,424 Hotel F1 238 17,898 National 9 973 Hotel Premiere Classe 252 17,748 Innkeeper`s Lodge 741 Howard Johnson Express 212 16,095 Good Night Inns 32 721 As of Year-End 2013

The “Class” Category The Class category is similar to Scale. The names of the categories are the same, but there is no “Independent” Class group. So there is only 6 Class categories, instead of the 7 Scale groups. Independent hotels are slotted into the Scale categories (Luxury through Economy) at similar ADR levels. Chain hotels are always in the same Class as Scale. So the Ritz-Carlton from before will always be in the Luxury Class group since it is in the Luxury Scale group. Class is used globally, but is especially popular outside of North America where there are more independent hotels.

Grouping Independent hotels into Classes
Here is some more information regarding the methodology that is used to slot the independent hotels into the Class groups. On a country-by-country basis, or in the case of major markets, a market-by-market basis, the ADRs of participating chain hotels are analyzed and breakpoints are created between the different Scale groups. The independent hotels are then combined into the different groups based upon the ADR of the independent property compared to the chain hotels. This is done at the beginning of the year based upon annual data for the prior year.

How Independent Hotels are Slotted by Class
Market Luxury Chains Annual 2013 ADR Range 6,660-9,324 PHP Upper Upscale Chains Annual 2013 ADR Range 4,884-6,659 PHP Upscale Chains Annual 2013 ADR Range 3,996-4,883 PHP Upper Midscale Chains Annual 2013 ADR Range 2,886-3,995 PHP Midscale Chains Annual 2013 ADR Range 2,220-2,885 PHP Economy Chains Annual 2013 ADR Range 1,332-2,219 PHP Independent Hotel Acme Hotel 2014 Annual ADR 5,550 PHP Because the hotels rate falls within the Upper Upscale rate range of 4,884 to 6,659 they are slotted as Upper Upscale Class

Importance of the “Class” Category
Class is relied upon heavily, especially outside North America. Non-North American STAR reports compare a subject hotel to the Market or Submarket/Tract Class, in addition to the competitive set . Depending upon participation, the Class groups may be “Collapsed” or combined as follows: Luxury and Upper Upscale, Upscale and Upper Midscale, or Midscale and Economy. North American STAR reports compare the subject hotel to the Market Class (all the hotels in the same Market and Class) along with other industry segments.

Philippine Hotels by Class
Properties Rooms Occupancy ADR** Room Revenue** Luxury Class 34 7,753 67.8% 7,382.50 14.8B Upper Upscale Class 36 5,911 71.7% 5,234.70 8.1B Upscale Class 28 6,675 66.4% 4,986.80 7.9B Upper Midscale Class 97 13,596 61.2% 3,551.30 10.7B Midscale Class 64 6,291 59.7% 2,119.90 2.9B Economy Class 71 6,529 67.3% 2,939.30 4.4B Occ , ADR and Room Revenue – 12 Month Ending October 2014 **ADR and Room Revenue is in Pesos

Global Hotels by Class Class Properties Rooms Occupancy ADR**
Room Revenue** Luxury Class 6,062 942,423 66.4% $277.98 $62.7B Upper Upscale Class 12,249 2,062,177 69.4% $165.44 $85.4B Upscale Class 23,650 3,012,886 69.0% $125.08 $93.9B Upper Midscale Class 29,133 2,964,599 65.5% $102.18 $71.6B Midscale Class 32,291 2,2672,117 60.8% $83.07 $48.9B Economy Class 60,448 3,621,798 60.3% $60.95 $48.2B Occ , ADR and Room Revenue – 12 Month Ending October 2014 **ADR and Room Revenue is in US dollars

Additional Non-geographic Categories - optional
In addition to the Scale and Class, STR tracks several other non-geographic categories, including: Location Extended Stay Boutique – very popular recently Destination Resort Additional Hotel Types such as All Inclusive, All Suite, B&B/Inn, Condo, Conference, Convention, Corporate Housing, and Timeshare Hotel Ratings – generally inconsistent in most parts of the world

Quiz Questions 6) Which is a true statement regarding geographic categorization? STR geographic categories are limited to North America STR uses the UNWTO definitions when it comes to recognizing countries General managers of hotels do not need to know geographic categories The hotel industry uses seven continents to categorize hotels 7) Which is a true statement regarding markets? Markets include hotels that are in big cities, not rural areas A country would never have more than 100 markets and never have less than 2 markets No market will ever cross country boundaries There is another name for Markets outside the U.S. 8) In descending order of geographic size, which option below is correct? Continent, Sub-Continent, Country, Submarket, Market Continent, Country, Sub-Continent, Submarket, Market Continent, Sub-Continent, Market, Country, Submarket Continent, Sub-Continent, Country, Market, Submarket

9) Which two geographic categories are the most important for a hotel GM? Region and Market Market and Submarket Region and Submarket Country and Submarket 10) Markets and tracts are created based on what two determining factors? Geographic size and population Geographic size and participation Number of hotels and participation Number of hotels and population 11) Which is a true statement regarding Tracts Tracts are referred to as Submarkets outside of North America Tracts are never used to represent a small city in a rural market Tracts are geographic sub-divisions of a Region A country will never have more than 100 Tracts

12) Changes to how Markets and Submarkets are geographically defined are made how often? Monthly Annually Every five years No regular schedule 13) Which two non-geographic categories are the most important for a hotel GM? Scale and Class Scale and Location Location and Type Class and Type 14) How many Scale categories are there compared to Class categories? 6 Scale categories and 6 Class categories 6 Scale categories and 7 Class categories 7 Scale categories and 6 Class categories 7 Scale categories and 7 Class categories

15) Which one of the following is an accurate statement regarding Scale and Class groups and a single chain? A Ritz Carlton hotel in the US can be in one Scale group and a Ritz Carlton hotel in Japan can be in a different Scale group A Ritz Carlton hotel in the US can be in one Class group and a Ritz Carlton hotel in Japan can be in a different Class group A Ritz Carlton hotel will always be in the same Scale and Class groups in every country throughout the world Ritz Carlton may choose which Scale and which Class they are in 16) Which one of the following is an accurate statement regarding Class groups? The names of the Class group are very different than the names of the Scale groups Class groups are more popular and relevant in North America rather than outside North America Independent hotels are slotted into Class groups based upon the ADR of the independent hotel compared to the chain hotels in the same market Once an independent hotel is slotted into a Class group, it will never change

Application 4 – Categories for a Hotel
Obtain the STR Hotel Census Database for your country (or state). Contact the STR SHARE Center for assistance. Select a specific hotel and then determine all of the various categories for your hotel (geographic and non-geographic groups). What are the major geographic categories: continent, subcontinent, country, market, and tract/submarket? What additional categories (region or state/province if applicable)? What are the non-geographic categories: scale, class? What is the location category? Is the property any special type of hotel (boutique, extended stay, destination resort)? Does the hotel offer any special amenities? What else can you tell about the hotel from the Census database?

Application 5 – Categories for a Market, starting a “Market Study”
When industry professionals conduct a “market study”, the goal is to learn about the hotel industry in a particular area, such as a country or city (or state). An important part of a good “market study” is size and structure information about the market related to the various geographic and non-geographic categories. Select a specific area such as a country or city. Obtain “Property and Room Count” data for your area to help drill down into all of the various categories below the area that you choose. You can obtain this data from STR for any area of the world.

Application 5 – “Market Study” continued
Identify the markets and tracts/submarkets within the area that you have selected. How many hotels are in each geographic category? Determine the number of hotels in each Scale and Class Category. You can also do this for Chain, Location, and Extended Stay group. You could check the Census database for your area and determine if there are any special type hotels (Boutique, Destination Resorts, Conference, …) Summarize this information. What observations can you make about the area that you are studying?

Application 5 – Market Study, Next Step
The Market Study that you started in this application contained size and structure information about your area. Keep this so that you can add more data to it at the end of the training. Later you will learn about various industry reports that contain different types of data related to an area. For example you can obtain a Trend Report for your area, that contains performance information (such as Year-to-Date or Annual Occupancy and ADR). This type of data can be included in a market study to show how various hotels in your area are performing. More information will be provided at the end of the training.

Part 3 – Introduction to Benchmarking in the Hotel Industry

Intro to Benchmarking in the Hotel Industry
What is “benchmarking”? Levels of benchmarking: Property, Corporate and Tourism organizations Competitive set key questions: What, Why, Who and When Creating Comp Sets – the Four P’s Rules for Comp Sets Changing Comp Sets Additional comp sets

Benchmarking 101: my hotel vs. the competition

Benchmarking in the Hotel Industry
Individual hotels compare their performance to the performance of a “competitive set” of hotels. Individual hotels can also compare their performance to hotels in pre-defined industry segments near their hotel, for example the market or submarket where they are located. Companies compare their own properties to a variety of comparative groups of hotels to gauge the performance of their portfolio. Tourism organizations also compare their local area to “comparable” markets.

What is a “Competitive Set”?
A competitive set is a group of hotels used primarily for comparison against a subject property for performance benchmarking purposes. The properties that comprise a comp set are competitive in nature; competing for the same guests and sharing similar qualitative and quantitative features.

How are Comp Sets used? Comp sets have an impact on several functions of a hotel from the day-to-day operations to managerial and top-level decisions. Comp set uses include, but are not limited to the following: Compare to the subject property for performance benchmarking purposes Aide the sales and marketing department Use in management contracts for performance requirements (often determines the amount of compensation managers receive) Use for internal and external analysis

Why are Comp Sets needed?
Historically, hoteliers have relied on each other for performance information (price, quality, quantity etc.). Hotel staff would perform “call arounds” where they would talk to staff from competitive hotels. They might also count cars in parking lots or windows with lights on. There is no way of assuring whether entities are being honest with each other, or whether their information is pertinent or relevant to that of the seekers.

Why Comp Sets? - continued
In the late 1980s, STR began collecting performance data from hotels and coined the term “comp set” within the hotel industry. STR essentially became a reliable place for hotels to get accurate aggregate information about their set of competitors. “Aggregating” means finding the averages based on the data from a group of hotels so that each individual hotel is protected from exploitation of their specific data. No individual property data is ever disclosed to another property.

Who chooses the Comp Set?
For a small independent hotel it may be easy. The hotel owner may choose the comp set by themselves. For a larger hotel or a chain hotel, there are many stakeholders when it comes to choosing a comp set: the Management Company the Chain (corporate staff) the GM the sales and marketing team The selection process becomes important because often, especially in the case of a chain hotel, the GM’s bonus is related to the performance of the hotel compared to the comp set.

Why don’t I just choose a comp set that I can easily beat
Why don’t I just choose a comp set that I can easily beat? – great question It would certainly be a temptation to choose a comp set that a hotel could easily beat (a “dog” comp set with lower occupancies and ADRs). Since there are financial implications, corporate staff are going to ensure that the comp set is accurate. Then you also have to define “beat”. What does that really mean and how do companies measure that? We will see later in the training, that an accurate comp set is really in the best interest of the subject hotel and that most GMs actually benefit from having tougher comp sets.

Key Considerations When Creating Comp Sets
When it comes to deciding upon a competitive set, you can think of the four “P”s. Participation – You obviously want hotels that submit data to STR. Proximity – Normally, your competitors will be relatively close to your hotel. Pricing – In most cases, your competitors will have similar prices to your hotel Product – Your competitors will generally be similar to your hotel when it comes to features and amenities.

Key Considerations - Participation
You obviously don’t want hotels in your comp set if they don’t submit data to STR. You can request “Participation Lists” which show basic hotel attribute information and participation details. Remember that participation can mean four different types of data: Monthly – this is usually the default Daily – most hotels submit daily data each day or each week Segmentation – many hotels submit Rooms Sold and Revenue broken down by Transient, Group, and Contract Additional Revenue – some hotels submit Food & Beverage and Other Revenue in addition to Room Revenue

Key Considerations - Proximity
You can obtain a list of potential competitors from STR with specific fields that indicate the proximity related to your hotel. Distance – from the competitor to the subject hotel. Market and Submarket - These categories will help you identify hotels that are geographically close to the subject hotel. You can also check other geographic fields such as City, Zip/Postal Code, County. Location – This field can help show clusters of hotels related to some other entity, such as an airport, a downtown area, or a beach or resort area.

Key Considerations - Pricing
On the list of competitors there will be several fields that provide some indication of the price level of the competitors. Scale – If you are a chain hotel, the Scale category will help to identify similar chain hotels. It is not uncommon to look for competitors in one scale category above or below the subject. Class – The Class Category will help to identify independent hotels that are in a similar category as the subject hotel. Fields such as Rack Rates (public info gathered through surveys) and Price Level can help provide some indirect pricing information. Price-related information can also be found on the internet.

Key Considerations - Product
There are other fields that will describe the features of hotels. Number of Rooms – In most cases the members of a Comp Set should be somewhat similar in size to the Subject hotel. Size is somewhat reflective of the type of business. Open Date – The age of the hotel can help when considering Comp Set members. Hotel Type – These fields (Boutique, Extended Stay, Convention, All-Suites, …) can help to identify hotels similar to the subject. Meeting Space – Compare these values for possible competitors. Amenities – Check these fields (Restaurant, Spa, Waterpark, Oceanfront, …) to help indentify similar hotels.

Key Considerations - Weighting
When you are analyzing the various attributes of potential competitors related to Participation, Proximity, Pricing, and Product; careful consideration does need to be given to the weight of each of these attributes. One person may put a much higher priority on Proximity than Pricing, and another person might put a higher priority on Product over both of these. Depending upon your situation, you may need to sacrifice in one area or another. Later in this section, we will talk about the fact that a hotel might have multiple comp sets. One of the obvious advantages is that different comp sets can be weighted more heavily on one consideration versus another.

Additional Considerations - optional
There is a great deal of external information that should be taken into consideration when creating comp sets. The web sites of potential competitors can give you an idea of the type of customer that they are targeting. Searching the internet can also help reveal the distribution and marketing strategies of potential competitors. Remember, you are trying to determine if a customer stays at your hotel, what other properties did they consider. Obviously many hotels conduct surveys to answer this question as well.

What is the Average Number of Properties in a Comp Set?
The average number of hotels in a primary Comp Set is between five and six. There is slight variation by scale.

Rules related to creating Comp Sets
STR has a set of rules when it comes to creating comp sets. The first rule relates to “sufficiency”. In North America and Asia Pacific, comp sets must include three or more hotels in addition to the subject. In Europe and Mideast/Africa, comp sets must include four or more hotels in addition to the subject. (This is related to strict EU anti-competition regulations.) Hotels are encouraged to have more than the minimum so if a hotel does not report for a time period for some reason, the comp set data will still appear.

Comp Sets Rules - continued
The second set of rules relate to “percentage checks” They help to ensure that the data of a single hotel, chain or company is not isolated in the comp set. When percentages are calculated the rooms of the subject hotel, as well as those in the same chain and parent company, are excluded. These rules are sometime referred to as the 40/40/60 rule (NA and Asia) or the 50/50/60 rule (elsewhere) and relate to the maximum percentage based on rooms for a single property or chain (Holiday Inn, Comfort Inn) or company (Starwood, Choice, Interstate, Host).

Additional Comp Sets There are many cases where hotels have more than one comp set. Multiple comp sets can serve different benchmarking purposes. Hotels with multiple comp sets could have various key competitive features and/or unique qualities. When a hotel changes its comp set, they may elect to keep the old on for a period of time to provide perspective. A second comp set must differ from the primary comp set by at least two properties. The same rules apply as for changes.

Reasons for Additional Comp Sets
There are a wide variety of reasons for additional comp sets: Local versus Regional – one set nearby and another farther away Subject hotel is between two markets or cities Aspirational – second set for hotels of higher quality or performance level Different sets focusing on different chains Different set for special niche (conference, water park, boutique) Index-focused (aiming to achieve a specific index) Different sets for Weekday/Weekend or Group/Transient mix Different entities may not agree – chain versus management company An old comp set is linked to a prior contract Hotel wants to be compared to a different industry segment

Quiz Questions 17) Benchmarking in the hotel industry takes place at what level? Property level for an individual hotel versus their Competitive Set Corporate level for a hotel company, for example one brand versus others Geographic level for tourism organizations, for example city versus comparable cities All of the above levels 18) Comp sets are used for many purposes in hotel operations, which of the following is one of these purposes? Comp sets can be used to aid the sales and marketing departments in determining the effectiveness of various pricing decisions Comp sets can be used in management contracts for performance requirements Comp sets can have an effect on a general managers compensation All of the above are examples of how comp sets are used 19) The four key considerations when creating a Competitive Set are? Participation, Proximity, Policy and Product Participation, Proximity, Pricing and Product Participation, Parking, Policy and Pricing Participation, Perimeter, Pool and Pricing

20) All of the following are good reason for a hotel to have an additional competitive set, except which one? Have a local competitive set based upon geography and another based upon a special feature or niche, for example: waterpark, boutique, or conference Have different sets for weekday/weekend or group/transient business Have one set that you can easily beat and another which is a realistic target Different entities may not agree, for example, chain versus management company 21) When can a competitive set be created? A competitive set may be created once the hotel has opened A competitive set may be created while the hotel is under construction A competitive set may be created on the one year anniversary of a hotel’s opening A competitive set may be created three months before a hotel opens 22) Who creates a competitive set for a chain hotel? Only the General Manager Only the Revenue Manager Only the Sales and Marketing Managers It is a joint effort involving many stakeholders

23) What is the average number of hotels in a competitive set? Between 3 and 4 Between 4 and 5 Between 5 and 6 Between 6 and 7 24) Which is a valid rule related to creating a competitive set? Comp sets must include five or more hotels No single property or chain can account for more than 25% of the total participating room supply of a comp set No single company can account for more than 75% of the total participating room supply of a comp set When percentages are calculated, the rooms of the subject hotel, as well as the same chain and parent company, are excluded

25) When can a competitive set be changed? Only if your hotel has changed affiliations At any time, although many wait until the beginning of the year Only at the beginning of the year Only when a hotel has a new general manager 26) Which is NOT a valid rule related to changing a competitive set? If adding two hotels to a competitive set, both must be in different chains A single hotel may be added to a competitive set if it has been open less than six months A single hotel may be added to a competitive set at any time Any change must involve two or more hotels, e.g. add one/drop one, add two, drop two, etc.

Application 6 – Creating Comp Sets
Obtain a Radial Participation List for a specific hotel. In the Application Exercise raw data file, there are Radial Participation Lists on different tabs for sample hotels (different scales, sizes, areas) in the Philippines. You can obtain samples relevant to your area if you would like. Shangri-La Edsa Manila (Luxury Class) Dusit Thani Manila (Upper Upscale Class) Marriott Manila Hotel (Upper Upscale Class) New World Manila Bay Hotel (Upper Midscale Class) Ramada Manila Central (Midscale Class)

Application 6 continued
Identify the important the fields in the Participation List based upon the guidelines related to the “four Ps”. Fields could include Distance, Class, Number of Rooms and Meeting Size. In each of these fields, compare the values of the subject hotel to the potential competitors to narrow down the choices. Check the Participation fields to see what types of data the Subject hotel submits compared to the potential competitors. What other fields could be useful to identify competitive hotels? You can use the internet to collect additional data regarding competitors, related to pricing, hotel web sites, amenities and target customers. Can you suggest a second comp set for your subject hotel?

Application 6 – Excel Alternative
Depending upon your experience with Excel, here is a suggested set of steps to help determine potential competitors using basic Excel steps. Obtain a Radial Participation List for a specific hotel. Highlight the subject hotel, the whole row. The list is sorted by the Distance field. Look at the hotels and the distances and determine a best case number for the first range. (This could be 1 mile for one hotel and 10 miles for a different hotel.) Using a different color, highlight just the Distance values (numbers only in the Distance column) for the hotels in the best case first range. Determine the number for a second range and highlight the next group with a different shade of the same color. Use the Excel “Sort” program to sort the Participation List by the Class column. Find the subject hotel and identify other hotels that are in the same Class as the subject. Using a different color, highlight just the Class values (Class names only in the Class column) for the hotels in the same group as the subject. Identify the hotels in one Class group higher or lower than the subject, and highlight these hotels with a different shade of the same color.

Application 6 alternative continued
Using different colors, repeat the process for the Number of Rooms and Meeting Space fields. For the first closest range, you might select hotels that are within 50 (you decide on the number) rooms (or 2000 square feet when it comes to meeting space) higher or lower than the subject hotel. Then for the second range, pick another number higher or lower than the first range and highlight that with a different shade. If there are other fields that are important, you can repeat the process for additional fields. Then use Excel to sort the hotels by Distance to return to the original order. Review the hotels in distance order looking for ones that have similar values to the subject in each of the fields that you used. The highlights will make this easier to see. Check the Participation fields to be sure the potential competitors submit similar data as the subject. This method helps you come up with a good list of potential candidates. Investigate the competitors more to confirm your decisions.

Part 4 – Introduction to Hotel Math

Introduction to Hotel Math
What is Raw Data? Key Performance Indicators – sample formulas Percent Changes - sample formula Multiple Time Periods – sample methodology Comparing Property Data to Other Groups of Hotels

Sample Raw Data Here is a sample monthly raw data file that STR would receive from a hotel company. Most raw data is exported from hotel company systems. It contains data for multiple hotels. Daily data is also reported on either a daily or weekly basis. Fictitious data, of course

The Uniform System of Accounts is available from the AHLA or HFTP.
STR Data Guidelines STR 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 month. Demand (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&B. The Uniform System of Accounts is available from the AHLA or HFTP.

Key Performance Indicators
From these raw data values, STR calculates the three hotel industry key performance indicators (KPIs): Occupancy - % Average Daily Rate (or ADR) - $ Revenue per Available Room (or RevPAR) - $ important metric, based upon all rooms, combination of occupancy and ADR. KPIs are Occupancy, ADR, and RevPAR.

Occupancy Definition The percentage of available rooms that were sold during a specific time period. Calculation Occupancy is calculated by dividing the Demand (number of rooms sold) by the Supply (number of rooms available). This is a percentage. (Remember you divide the smaller number by the larger number.) Occupancy = Demand / Supply or Occupancy = Rooms Sold / Rooms Available

Monthly Occupancy - Formula
B C D E F G 1 Supply Demand Revenue (Formula) Occupancy (%) 2 Jan-10 3100 2345 198765 C2 / B2 * 100 75.6 3 Feb-10 2800 2002 175432 C3 / B3 * 100 71.5 4 Mar-10 1776 175012 C4 / B4 * 100 57.3 5 Apr-10 3000 2468 234567 C5 / B5 * 100 82.3 6 May-10 2987 312345 C6 / B6 * 100 96.4 Hotel Math Fundamentals Excel.xlsx - Occupancy!A1 You could multiply times 100 (then format as a number with one decimal) or format as a percentage (adds % symbol).

ADR Definition A measure of the average rate paid for rooms sold during a specific time period. Calculation ADR is calculated by dividing the Room Revenue by the Demand (Rooms Sold). This is a dollar amount. ADR = Revenue / Demand

Monthly ADR - Formula A B C D E F G 1 Supply Demand Revenue (Formula)
2 Jan-10 3100 2345 198765 D2 / C2 84.76 3 Feb-10 2800 2002 175432 D3 / C3 87.63 4 Mar-10 1776 175012 D4 / C4 98.54 5 Apr-10 3000 2468 234567 D5 / C5 95.04 6 May-10 2987 312345 D6 / C6 104.57 Hotel Math Fundamentals Excel.xlsx - ADR You could format as a “$” (adds symbol) or as a number with two decimals.

RevPAR = Revenue / Supply
Definition A 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. Calculation RevPAR is calculated by dividing the Room Revenue by the total number of Rooms Available, the Supply. This is a dollar amount. RevPAR = Revenue / Supply

Monthly RevPAR – Formula
B C D E F G 1 Supply Demand Revenue (Formula) RevPAR ($) 2 Jan-10 3100 2345 198765 D2 / B2 64.12 3 Feb-10 2800 2002 175432 D3 / B3 62.65 4 Mar-10 1776 175012 D4 / B4 56.46 5 Apr-10 3000 2468 234567 D5 / B5 78.19 6 May-10 2987 312345 D6 / B6 100.76 Hotel Math Fundamentals Excel.xlsx - RevPAR!A1 You could format as a “$” or as a number with two decimals.

Hint – Importance of RevPAR
RevPAR is a very important 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) is evaluated or measured, RevPAR is the metric that is being looked at.

Percent Change = (This Year – Last Year) / Last Year * 100
Percent Changes Definition The comparison of the This Year (TY) number versus the Last Year (LY) number, 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. Calculation The “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 * 100 Remember the parentheses for the “order of operations”.

Demand Percent Change A B C D E F G 1 This Year Last Year
A B C D E F G 1 This Year Last Year Percent Change 2 Demand (Formula) 3 Jan-10 2345 2456 (B3-D3)/D3*100 -4.5 4 Feb-10 2002 2112 (B4-D4)/D4*100 -5.2 5 Mar-10 1776 1750 (B5-D5)/D5*100 1.5 6 Apr-10 2468 (B6-D6)/D6*100 5.2 7 May-10 2987 2555 (B7-D7)/D7*100 16.9 Hotel Math Fundamentals Excel.xlsx - DemandPercentChange!A1 You could multiply times 100 or format as a percentage.

Hint - Percent Changes in General
Percent Changes are closely scrutinized by the industry. A positive Percent Change indicates that the number this year is greater than the number last year. For example the Occupancy or ADR value is growing or improving. A negative Percent Change indicates that the number this year is less than the number last year. For example the Occupancy or ADR value is decreasing or getting worse.

Hint - % Changes for Raw Values
The Percent Changes for raw values such as Supply, Demand, and Revenue are valuable bits of information. Supply Percent Change shows whether there are more or less rooms available in the hotel(s) or market this year versus last year. Demand Percent Change shows whether there are more or less rooms sold (guests spending the night) this year versus last year. Revenue Percent Change shows whether there is more or less money being made by the hotel or hotels (and therefore being spent by those guests).

ADR Percent Change A B C D E F G 1 2010 2009 Percent Change 2 ADR
A B C D E F G 1 2010 2009 Percent Change 2 ADR (Formula) 3 Jan-10 84.76 81.93 (B3-D3)/D3*100 3.5 4 Feb-10 87.63 88.85 (B4-D4)/D4*100 -1.4 5 Mar-10 98.54 100.07 (B5-D5)/D5*100 -1.5 6 Apr-10 95.04 95.24 (B6-D6)/D6*100 -0.2 7 May-10 104.57 116.93 (B7-D7)/D7*100 -10.6 Hotel Math Fundamentals Excel.xlsx - ADRPercentChange!A1 You could multiply times 100 or format as a percentage.

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.

Multiple Time Periods - Monthly
Multiple time periods for monthly data include: Year-to-Date (YTD) – January through the current month of the current year. Running 12-Month – the current month plus the prior 11 months, also called a 12-Month Moving Average. Running 3-Month – the current month plus the prior two months. The metrics for all of these time periods are based upon the aggregated raw monthly data. So you aggregate the Supply, Demand, and Revenue for all the months and then apply the Occupancy, ADR, and RevPAR formulas.

YTD Supply, Demand, & Revenue
A B C D 1 Supply Demand Revenue 2 Jan-10 3100 2345 198765 3 Feb-10 2800 2002 175432 4 Mar-10 1776 175012 5 Apr-10 3000 2468 234567 6 May-10 2987 312345 7 (Formula) sum(B2:B6) sum(C2:C6) sum(D2:D6) 8 May YTD 15100 11578 Hotel Math Fundamentals Excel.xlsx - YTDSupplyDemandRevenue!A1 You can use the SUM function to aggregate the raw values.

YTD Occupancy, ADR, & RevPAR
A B C D E F G 1 Supply Demand Revenue Occupancy ADR RevPAR 2 Jan-10 3100 2345 198765 3 Feb-10 2800 2002 175432 4 Mar-10 1776 175012 5 Apr-10 3000 2468 234567 6 May-10 2987 312345 7 YTD 15100 11578 76.7 94.67 72.59 8 (Formula) C7/B7*100 D7/C7 D7/B7 Hotel Math Fundamentals Excel.xlsx - 'YTD Occ, ADR, RevPAR'!A1 Aggregate the raw values, then apply same formulas as before.

How not to calculate metrics for multiple time periods?
Numbers for multiple time periods never use straight averages of monthly values. Some people mistakenly compute YTD occupancy, for example, by adding the occupancy of each month and dividing by the number of months. This gives you a number which is close to the accurate number, but this methodology assigns the same weight to each month, instead of weighting based upon the number of days in each month.

Index Numbers Index numbers are another example of a formula used by the hotel industry. Index numbers compare the performance of the subject property to the comp set. Here is the formula: Subject Value / Comp Set Value * 100 A number greater than 100 means the subject property outperformed the comp set and a number below 100 means the comp set outperformed the subject property. Index numbers are available for Occupancy, ADR, and RevPAR. They are relied upon heavily. Index numbers are percentages, multiple * 100 or format as %.

Occupancy, ADR, & RevPAR Indexes
A B C D E F G H I J Subject Property Comp Set Index Numbers 1 Occu-pancy ADR Rev-PAR Occupancy RevPAR 2 May-10 96.4 104.57 100.76 78.9 87.80 69.29 122.2 119.1 145.4 3 (Formula) B2/E2*100 C2/F2*100 D2/G2*100 Hotel Math Fundamentals Excel.xlsx - 'Occ, ADR, RevPAR Indexes'!A1 Calc KPIs for Subject & Comp, then apply Index formula.

Hotel Math The math used in basic hotel industry performance metrics is not too challenging. There are a set of formulas that someone needs to understand, such as Occupancy, ADR, RevPAR, Percent Changes and Index Numbers. There are methodologies that someone needs to understand, for example a YTD number is based upon aggregated data, not straight averages. The hotel industry relies heavily upon data and the ability to effectively analyze that data is an important skill.

Quiz Questions 27) The definitions for Supply, Demand and Revenue used by STR and others in the lodging industry are taken from what source? Lodging Industry Accounting Fundamentals Guide Uniform System of Accounts for the Lodging Industry Hotel Book Keeping for Dummies Modern Hotel Industry Accounting 28) Which statement is true regarding raw data that is submitted to STR? A small amount comes in the form of raw data files Most data is entered online There are limited error check programs The majority of data is exported from the hotel company systems 29) Which is true regarding the type of performance data (Supply, Demand, Revenue) that STR receives? Daily only Daily and monthly only Daily, weekly, and monthly Daily, weekly, monthly and quarterly

30) Which statement is true regarding RevPAR? It is almost always higher than ADR It can be thought of as a combination of Supply and Demand When a hotel or GM is evaluated, the RevPAR metric is rarely considered It can be thought of as a combination of Occupancy and ADR Use the spreadsheet below to answer questions 31 A B C D E F G 1 2013 Supply Demand Revenue Occupancy ADR RevPAR 2 Jan 4650 2883 374790 3 Feb 4200 2394 304038 4 Mar 3255 462210 5 Mar YTD 31) The March YTD Occupancy (E5) is _______ . 62% 63.2% 65% 60.5%

Use the spreadsheet below to answer questions 32 A B C D E F G 1 2013 Occupancy This Year ADR This Year Occupancy Last Year ADR Last Year Occupancy % Change ADR % Change 2 Jan 63.7 $120.40 62.4 $118.72 3 Feb 66.3 $133.74 65.3 $126.43 4 Mar 68.5 $142.65 67.7 $133.70 5 Apr 68.2 $138.00 68.9 $135.92 32) The Average Daily Rate percent change for April (G5) is ______. 2.1% -2.1% 1.5% 1.4%

Application 7 – Monthly Data
Obtain a sample raw monthly data file (in Excel) with 48 months of property data for single sample hotel. The file will contain columns for STR Number, Month Date, Supply, Demand, and Revenue. Create three columns at the end for Occupancy, ADR, and RevPAR. Enter the formulas for each metric and copy the formulas to each row. Insert one column after each of the six metrics and add formulas for percent changes. You will have to compare the “This Year” value to the “Last Year” value which appears 12 rows above. You will not be able to derive these metrics for the first year of data. What can you learn about this single hotel by analyzing the data that you have just computed?

Part 5 – Introduction to Hotel Industry Reports

Introduction to Hotel Industry Reports
Property Level – the STAR Report Ad-Hoc Reports Trend Report Profitability/HOST Report Pipeline Report Destination Report

Types of Hotel Industry Reports
A wide variety of reports are used to help analyze different aspects of the hotel industry. Here are the major types: Property-level Reports – comparing a single property to other sets of hotels Ad-Hoc Reports – analyzing various performance or development metrics for a set of hotels Destination Reports – analyzing performance data for multiple sets of hotels

Property Level Reports - the STAR Report
The most popular property level report used by the industry is the STAR Report. The name “STAR” stands for “Smith Travel Accommodations Report”. The original version of this report was launched in 1987. The STAR Reports compare the performance of the subject hotel to other comparative groups of properties. STAR Reports are generated on a monthly, weekly and daily basis.

STAR Report Details STAR Reports are normally generated in the form of Excel workbooks. They are automatically distributed electronically to staff persons responsible for each hotel. No one else has access to a STAR Report for an individual hotel. The STAR Reports contain multiple tabs/pages with lots of different types of data. Experienced hotel staff use this data to improve the performance of the hotel versus their competitors.

Sample Monthly STAR Report
We will review three tabs of a sample Monthly STAR Report. These are among the most popular pages: Table of Contents – displays the subject hotel name, date information, and a list of all the pages included Monthly Performance At A Glance Page Competitive Set Page

Monthly Table of Contents

Tab 2 - Monthly Performance at a Glance
Provides a quick one-page overview of performance relative to your comp set. Displays Occupancy, ADR, and RevPAR for your property and your comp set, also Index numbers (subject property value/comp set value) and Percent Changes. For four points in time: Current Month, Year to Date, Running 3-month, and Running 12-month. Also displays basic information for the subject property and the report settings at the top.

Monthly Performance at a Glance

At a Glance - Hints Use this page to obtain a quick performance overview of the subject hotel compared to the comp set. Check the KPI Index Numbers for the current month. Check KPI actual values for your hotel and the comp set. Check the Percent Changes for the Indexes and the actual values to analyze year-over-year performance. Compare the Current Month metrics to the other time periods displayed to see how the current month performance compares to recent trends. Running Index numbers and Percent Changes will provide a longer term perspective.

Tab 4 – Competitive Set Report
Provides a historic comparison of your property to your comp set over time. Displays Occupancy, ADR, and RevPAR, as well as Percent Changes, Index numbers (subject property value/comp set value), and Ranking information (subject property position X of Y). Shows 18 months of monthly data and 3 years of Year to Date, Running 3-month, and Running 12-month. Graphs monthly indexes (line graph) and RevPAR Percent Changes (separate bar graphs for YTD and Running numbers).

Competitive Set Report

Competitive Set Report – Graph of Indexes
The dotted line represents an Index of 100. The graph shows 18 months of Occupancy (blue), ADR (green=$), and RevPAR (brown) indexes by month. Allows you to see interaction of indexes over time.

Competitive Set Report – Another Sample Graph
Here is a hypothetical scenario. In April the general manager decided to raise rates. They may have thought they had a loyal customer base. What happened? (The occupancy was immediately affected to a significant degree.) The hotel continued for several months and ADRs were still affected. In June the hotel lowered rates and Occupancy returned. Did the general manager do the wrong thing? (No, they should be trying things like this. It did not have the intended results.) What else could they try?

Competitive Set Report – Monthly Data Tables
The monthly table displays 18 months of occupancy, ADR and RevPAR for your hotel versus the competitive set. Includes Percent Change calculations, Index numbers, and Ranking information. (Index = Property performance / competitive set performance X 100)

Ad-Hoc Reports

Intro to Ad-Hoc Reports
These reports are generated on a one-time basis as a special request. They can be obtained by anyone. (This is different than a STAR Report that can only be received by someone related to the subject hotel.) There are flexible methods to select the user-defined group of hotels that a person wishes to analyze. The ad-hoc reports are generated in the form of an Excel workbook.

Types of Ad-Hoc Reports
There are several ad-hoc reports that analyze different types of data. These are the most popular examples: Trend Report – displays performance information (Supply, Demand, Revenue, Occupancy, ADR, RevPAR) for a user- defined group of hotels Profitability/HOST Report – displays profit and loss data for a group of hotels Pipeline Report – displays past and future development information for an area

Trend Reports Trend Reports are the most popular type of ad-hoc report. Trend reports display historic monthly performance data for a user-defined group of hotels. Daily data and Segmentation data may also be included upon request. We will review two tabs of a sample Trend Report: Table of Contents – displays the name of the group of hotels, date information, and a list of all the pages included Classic Page – displays multiple columns of performance information

Trend Table of Contents

Sample Page from a Trend Report – the Classic Page

Pipeline Reports Pipeline Reports display statistics on past and future hotel development in an area. The term “Pipeline” refers to hotels that are currently under construction or in phases of planning. We will review two tabs of a sample Pipeline Report: Table of Contents – displays the name of the area Summary Page – displays overview of past and future development

Pipeline Report – Table of Contents

Supply Summary

Profitability/HOST Reports
Different names…similar format…same data. In the U.S. the report is called a HOST (stands for “Hotel Operating Statistics”) Report, while outside the U.S. it is called a Profitability Report. A Profitability/HOST Report displays annual Profit and Loss information, including Revenue, Expense, and Profit accounts We will review two tabs of a sample Profitability Report: Table of Contents – displays the name of the selected group Summary Page – displays several metrics for various P&L accounts

Profitability Report – Table of Contents

Tab 2 - Profitability Report - Summary page

Tab 2 - Profitability Report - Summary page continued

What is a Destination Report?
Destination Reports are frequently used by tourism organizations, local hotel associations and convention and visitor bureaus. These organizations can create a personalized report to help them analyze the performance of any area of interest. We will review the most popular tabs of a Destination Report: Multi-Segment Page – displays current month and YTD numbers for multiple user-defined groups of hotels

Monthly Multi-Segment – Sample

Additional Industry Reports - optional
While the Trend, Pipeline and Profitability Reports are the most popular ad-hoc reports, there are others that are commonly used as well. These include: Forecast Reports – projected performance information Census Database – hotel attribute information, over 100 fields of data Property and Room Counts – size and structure information for an area, for example hotels in a market by Scale and Chain

Sample Forecast Report – Annual & Quarterly Outlook

Sample Property and Room Counts (delivered in Excel)
Market Submarket CensusProps CensusRooms SampleProps SampleRooms Beijing Beijing North 128 22860 27 6489 Beijing South 315 47311 98 16518 Beijing West 157 31316 37 7578 CBD/Dongzhimen/Jianguomen 110 23983 43 13935 Downtown/Financial Street 219 35413 77 17035 Outer Beijing 265 41211 79 11370 Yansha/Guozhan Center 84 17516 30 8786 East China excl Hangzhou Anhui Area 131 17886 46 7809 East China Rural 333 48357 108 14304 Hefei 111 16710 32 6158 Jiangsu 547 75668 182 27957 Nanjing 263 36966 70 12213 Ningbo 165 25942 42 8246 Qingdao 197 30510 64 12667 Shangdong Area 543 64997 149 18625 Suzhou 34190 82 14259 Wuxi 115 19022 41 8175 Xiamen 155 26981 38 7707 Zhejiang Area 277 41887 60 10345 Guangzhou Baiyun District 61 8808 11 2087 Guangzhou Area 26303 22 5088 Tianhe District 122 23172 31 8578 Yuexiu District 129 24083 25 5748 Hainan Regional 91 21277 6753 Hangzhou Hangzhou Area 195 30555 52 8696 Hangzhou Qiandao Lake 17 3610 5 1455 Hangzhou West Lake Business District 154 24386 45 7913 Henan Area Henan Regional 120 17025 33 4857 Zhengzhou 18236 34 6654

Sample Census Database File (delivered in Excel)
Hotel Name Physical Address Line 1 Physical Address Line 2 Physical City Physical State Physical Country Physical Postal Code Continent Sub-Continent Super 8 Hotel Beijing Changping Gu Lou Dong 36 Of East Gu Lou Street Beijing Beijing, China China 044104 Asia Pacific Northeastern Asia Crowne Plaza Beijing Lido 6 Jiangtai Road Building A Chaoyang District 100004 Oriental Bay International Hotel 26 Anwai Xibinhe Road Dongcheng District 100011 Hainan Hotel 188 Andingmenwai Avenue Phoenix Palace Lakeview Hotel South Gate Of Rendinghu Park Zhongan Inn Andingmen Hotel 168 Andingmen Wai Avenue Super 8 Hotel Beijing You An Men 6 You An Men Wai Street Fengtai District Mailing Address Mailing City Mailing State Mailing Country Mailing Postal Code Phone# Fax# Rooms Year Built Restaurant Affiliation 36 OF EAST GU LOU STREET BEIJING Beijing, China China 044104 61 201209 N Super 8 6 JIANGTAI ROAD BUILDING A 100004 466 201402 Y Crowne Plaza 26 ANWAI XIBINHE ROAD 100011 359 Independent 188 ANDINGMENWAI AVENUE 115 199406 SOUTH GATE OF RENDINGHU PARK 86 168 ANDINGMEN WAI AVENUE 148 6 YOU AN MEN WAI STREET 80 201009 Operation Parent Company Company Code Market Submarket Year Affiliated Ex-Affil Convention Conference Ski Spa Golf Boutique All Suites Casino Franchise Wyndham Wo WYNW Beijing Beijing North 201209 Chain Management Interconti ICHG 201402 Independent 199406 Largest Meeting Space (sq ft) Meeting Space (sq ft) Location Scale Class STAR Participant STR# Urban Economy Chains Economy Class Y 207568 12825 13653 Upscale Chains Upscale Class 212428 3000 Suburban Independents Upper Upscale Class 143338 Upper Midscale Class N 143758 177324 Midscale Class 177585 192288

Quiz Questions 33) Which is NOT an accurate statement regarding the differences between STAR Reports, Ad-hoc Industry Reports, and Destination Reports? Ad-hoc Industry Reports are requested on a one-time, as needed basis Hotels and hotel companies have annual subscriptions to STAR reports and receive them on a regular basis Destination Reports are most often received by tourism organizations Ad-Hoc Industry reports or Destination Reports can only be requested by hotel companies 34) Which of the following is NOT a valid type of data that you can request to include on a Trend Report, in addition to monthly data? Daily data Weekly data 12-month moving average data Segmentation data

Using the information from an excerpt of a sample “Trend Report”, answer the following question. Date Occupancy ADR RevPar This Year % Chg Jan 12 65.9 12.0 102.08 6.3 67.23 19.1 Feb 12 68.1 -0.8 108.64 5.4 74.02 4.6 Mar 12 80.1 -0.1 137.67 8.0 110.29 Apr 12 84.8 148.49 11.5 125.93 18.4 May 12 81.4 -4.4 177.83 5.2 144.80 0.6 Jun 12 94.0 3.7 199.11 3.1 187.13 6.9 Jul 12 89.7 -1.0 166.30 149.21 2.1 Aug 12 89.6 0.4 171.65 5.9 153.87 6.4 Sep 12 90.4 5.1 193.06 15.0 174.50 20.9 Oct 12 91.7 4.3 198.63 10.7 182.14 15.6 Nov 12 83.7 -2.3 175.93 4.4 147.24 Dec 12 73.1 6.5 111.63 -2.1 81.54 Sep YTD 2012 82.8 2.0 159.73 6.7 132.19 8.9 Total 2012 2.2 161.13 133.37 8.7 Jan 13 63.2 -4.0 104.13 65.85 Feb 13 73.2 7.4 110.43 1.6 80.80 9.1 Mar 13 145.35 5.6 123.29 11.8 Apr 13 155.54 4.7 131.83 May 13 91.3 12.1 181.69 165.83 14.5 Jun 13 72.3 -23.0 210.56 5.8 152.33 -18.6 Jul 13 -7.7 182.55 9.8 151.18 1.3 Aug 13 85.2 -4.9 176.24 2.7 150.23 -2.4 Sep 13 82.7 -8.6 190.15 -1.5 157.17 -9.9 Sep YTD 2013 80.2 -3.1 167.81 134.61 1.8 35) Which one of the following is an accurate statement? The occupancy for the year-to-date period ending September 2012 is down from the same period in 2011 The ADR for the first eight months of 2013 was up from the same two periods in 2012 The September YTD occupancy for both 2013 and 2012 was exactly the same The RevPAR in every month of 2013 was greater than the same months in 2012

Using the sample “Supply Summary” page from a Pipeline Report, answer the following two questions Historic Supply Pipeline Projects Rooms Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 In Constr. Final Planning Planning Pre Planning Luxury 185 Upper Upscale 4,393 3,681 4,395 4,197 4,641 475 Upscale 4,047 4,160 4,985 5,691 6,065 6,134 535 576 300 Upper Midscale 6,007 5,793 5,811 5,819 5,851 5,570 579 1,084 499 Midscale 1,165 1,450 1,412 1,438 1,650 1,572 105 Economy 3,696 3,701 3,775 3,770 3,859 4,035 86 Independent 2,614 2,318 3,109 2,384 2,307 2,218 175 616 Total 21,922 21,815 22,958 23,682 24,114 24,355 1,114 2,326 974 36) Which one of the following is an accurate statement regarding Supply growth over the last 5 years? The Upper Upscale segment has the largest decrease in supply The Upscale segment experienced a significant increase in supply The Luxury Scale group experienced a significant decrease in Supply The Independent supply increased significantly from 2010 to 2013

37) What are the four phases for hotel projects in the development pipeline? In Construction, Post Planning, Planning and Pre-Planning In Construction, Final Planning, Planning and Pre-Planning In Construction, Final Planning, Post Planning and Pre-Planning In Construction, Post Planning, Planning and Pre-Permit 38) A Profitability report displays what type of information? Profit and Loss information, including revenue, expenses and profit accounts Balance Sheet (Assets) information Monthly performance (Occupancy, ADR, RevPAR) data All of the above 39) The Profitability Report displays data based upon what time period? Weekly Monthly Quarterly Annual

40) Destination Reports are most often used by? Hotel Associations Tourism Organizations Convention and Visitor Bureaus All of the above

Application 8 – Analyzing Industry Reports
Obtain a sample industry report (modified version with just the pages covered in the training). There are four possible reports: Monthly STAR Report – Life-like data for a single hotel Trend Report – for a user-defined set of hotels Pipeline Report – for a user-defined geographic area Profitability Report – for a user-defined set of hotels Using the data from these reports, make as many observations as possible related to the hotel or hotels that are analyzed in the various pages that you see. Why is data and the analysis of that data so important to the hotel industry?

Application 9 – Market Study part 2
In application 5, you selected a market or country and started a Market Study with size and structure information from Property and Room Counts. Obtain one or more of the following industry reports for the same market or country: Trend Report Pipeline Report Profitability Report Using the data from the Trend Report, add performance data such as YTD or last year occupancy, ADR, and RevPAR and the percent changes for your market. You could show recent metrics as of the current month. You could also show a longer historic trend of monthly data over time.

Application 9 – Market Study part 2
Using the data from the Pipeline Report, add information about the types of hotels that have been built in your market during the recent years. Using the data from the Profitability Report, add information about the profitability of hotels in your market. You could include information about non-room revenues and expenses.

Questions? Steve Hood shood@str.com +1 615-824-8664, extension 3315
Duane Vinson , extension 3329

Transition Slide

Total United States Occupancy and ADR Percent Change July YTD & Weekly through 9/10

Hotel Industry Foundations and Introduction for the Philippines

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Hotel Industry Foundations and Introduction for the Philippines

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Presentation on theme: "Hotel Industry Foundations and Introduction for the Philippines"— Presentation transcript:

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About project

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