Competitive Set Analysis and the STAR Report

What Is the STAR Report?

The STAR report is a benchmarking tool produced by STR (formerly Smith Travel Research), the hospitality industry's leading data analytics firm. Hotels submit their own occupancy, average daily rate (ADR), and rooms-revenue figures to STR on a regular basis. STR aggregates those figures across a defined group of similar, competing hotels—called a competitive set, or comp set—and returns a confidential report to each participating property. The result lets a hotel manager compare their property's performance directly against the market, without ever seeing a competitor's raw numbers.

Understanding the STAR report is a core skill for anyone working in hotel revenue management or in a supervisory role, because the numbers guide decisions about pricing, staffing, and sales strategy.

The Three Key Performance Metrics

Before reading the indexes, you need to understand the three metrics the report tracks:

• Occupancy – the percentage of available rooms that were sold during a given period.
• Average Daily Rate (ADR) – total rooms revenue divided by the number of rooms sold.
• RevPAR (Revenue Per Available Room) – total rooms revenue divided by the total number of rooms available. RevPAR captures both occupancy and rate in one number and is the most important top-line performance indicator in lodging.

The Index Numbers: MPI, ARI, and RGI

The STAR report converts each metric into an index that shows how your hotel performed relative to its comp set. The three indexes are:

| Index | Full Name | Metric It Measures |

|---|---|---|

| MPI | Market Penetration Index | Occupancy |

| ARI | Average Rate Index | ADR |

| RGI | Revenue Generation Index | RevPAR |

All three indexes are calculated the same way:

> Index = (Your Hotel's Metric ÷ Comp Set's Metric) × 100

Interpreting the result is straightforward:

• Index above 100 – your hotel is outperforming the comp set (capturing more than its fair share).
• Index equal to 100 – your hotel is performing exactly at the comp set average (holding fair share).
• Index below 100 – your hotel is underperforming the comp set (losing share to competitors).

For example, an RGI of 112 means your hotel is generating 12% more RevPAR per available room than the average of its competitors. An MPI of 88 means your occupancy is 12% below the comp set average.

Reading the Report: Time Periods

A STAR report typically presents data across several time windows so you can spot trends:

• Month to date (MTD) – the current partial month.
• Running three months – a short-term trend view.
• Running 12 months – the most stable, seasonally balanced view.
• Year to date (YTD) – performance since January 1.

Revenue managers look at multiple periods because a single month can be skewed by a local event, a renovation, or a major group booking. The 12-month running figure smooths those spikes and gives the most reliable picture of competitive position.

What Can Change an Index?

An index can move for two reasons: your hotel changed, or the comp set changed. If your hotel holds occupancy steady but competitors all raise their rates, your ARI will fall even though you did nothing wrong in absolute terms. This is why managers always ask: "Did we improve, or did the market shift?"

Common causes of a declining index include aggressive discounting by a new competitor, loss of a corporate account, or deferred property renovations that make guests choose rivals. A rising index often reflects a successful rate strategy, a new sales effort, or a competitor temporarily closing for renovation.

Practical Steps for Reading a STAR Report

1. Orient yourself. Confirm the report period, your hotel's name, and the number of properties in the comp set.

2. Find the index columns. Look for MPI, ARI, and RGI in the summary table.

3. Note the direction. Is each index above, at, or below 100?

4. Compare time periods. Is the trend improving or declining across MTD, YTD, and 12-month running?

5. Flag anomalies. A single period that spikes or drops sharply deserves further investigation before drawing conclusions.

6. Draft conclusions carefully. An index tells you what happened; you must research why before recommending action.

Accuracy and Ethical Use of Data

STR data is submitted in confidence. Hotels agree not to share another property's individually identifiable data with outside parties. When you prepare a memo or presentation using STAR data, you report your own hotel's indexes only—never attempt to reverse-engineer a competitor's individual figures. Misrepresenting competitive data to ownership or investors can have serious legal and professional consequences. Always present indexes with the time period clearly labeled so readers are not misled.

Connecting to Your Credential

The AHLEI Hospitality Supervisor and Front Desk Representative credentials both expect candidates to understand how a hotel measures success against its market. Revenue management concepts—including competitive benchmarking—appear in AHLEI study materials because supervisors at every level are expected to explain performance results to their teams and act on the information they receive.