Step
2: Evaluate Hotel Performance
To accurately assess your hotel's
performance, you need to analyze historical data to identify key trends. A
thorough internal evaluation helps you:
- Track demand trends, segment mix, Average Daily Rate
(ADR), and price sensitivity by length of stay (LOS), room type, and
accommodation tier.
- Identify your hotel’s main customer segments.
Key tools for assessing property
performance include:
- LOA Demand Eye Charts (Summary and Detail)
- Tier Evaluation Report
- Extended Stay Benchmark Pricing Evaluator Tool
- MRDW reports
Understanding
Your Hotel’s Seasonality
- Define Property Seasons: Identifying your property's high, low, and shoulder
seasons helps isolate demand trends from seasonal fluctuations. Refer to
the "Determining a Hotel’s Seasonality" section for more
guidance.
Analyzing
Hotel Performance by Steps
- LOA Demand Eye Charts Overview
- Access LOA Demand Eye Charts , which can be
downloaded as Excel files.
- Time Periods:
Use the "last 13 periods" report for a yearly overview or
"last 3 periods" for seasonal analysis.
- Room Pools:
Review by room types (e.g., studio, two-bedroom) or entire hotel for a
broader perspective.
- Benchmark Rate:
Identify benchmark rates through market codes (e.g., 12 for weekdays
- Demand Trends Review
- Analyze the Demand % Change from LOA Demand Eye
Chart - Detail reports for both Corporate/Regular weekday demand and
total transient demand.
- If corporate demand is falling more than transient
demand, your benchmark rate may need adjustment.
- Corporate and Above Mix Analysis
- Review your Corporate & Above Mix (sum of
market codes 10, 12, and 18) by room pool and overall hotel to see if it
remains a significant portion of your transient mix.
- Compare changes in Corporate & Above Mix to
total transient mix. If corporate demand decreases while transient demand
increases, you may be discounting too much.
- Transient Rate Efficiency
- Check Transient Rate Efficiency (Transient
ADR/Benchmark ADR). If it’s below 85%, it may indicate excessive
discounts, suggesting the property is overpriced.
- Baseline Rate Discount
- Compare your Baseline Rate to the benchmark. A
discount higher than 15% suggests the benchmark rate may be too high.
- Price Sensitivity
- Analyze the Price Sensitivity column (Price
Turndowns / [Price Turndowns + Room Nights]) to assess the effectiveness
of your pricing strategy. Higher price sensitivity indicates potential
overpricing.
- Benchmark Price Sensitivity
- Use the Extended Stay Benchmark Pricing Evaluator
Tool to determine whether your LOS tiers and room pools are
potentially overpriced or underpriced based on criteria like transient
rate efficiency and baseline discount.
- RevPAR, ADR, and Occupancy Trends
- Review RevPAR, ADR, and Occupancy through Market
Segmentation Weekday/Weekend Summary (SEG2) and LOA Demand Eye
Chart – Detail to spot significant shifts in performance.
- Mix Trends
- Examine mix trends using LOA Demand Eye Chart
to understand changes in customer behavior, focusing on segments that
contribute to demand shifts.
- Demand and Price Turndowns
- Analyze demand by day of the week and price
turndown trends using the Summary Demand Report (DEM1). This will
help evaluate price sensitivity and understand whether occupancy levels
justify price resistance.
- Extended Stay Occupancy (ES OCC)
- Monitor ES OCC trends across room pools to
ensure your property is positioned to capture extended stay business.
- Business Transient Trends
- Use Company Production Reports (CMP 2, CMP 6, CMP
8) to monitor production patterns for negotiated accounts, ensuring
these accounts contribute value without crowding out extended stay
business.
- Group Segment Review
- Analyze group performance in comparison to transient
demand using LOA Demand Eye Charts – Detail Report, focusing on
group mix, ADR, and price sensitivity.
By systematically evaluating these
metrics, you can fine-tune your pricing and mix strategy to optimize demand and
revenue performance across all segments.