CHIA Competitive Intelligence & Benchmarking 1 — Questions and Answers
Question 1: In hotel benchmarking, what does the acronym STR stand for?
- Smith Travel Research (Correct answer)
- Standard Tourism Registry
- Strategic Trend Reporting
- Supply & Traffic Research
Correct answer: Smith Travel Research
STR (Smith Travel Research) is the primary benchmarking data provider for the hotel industry, supplying competitive performance data used in STAR reports.
Question 2: A hotel's Revenue Generation Index (RGI) is calculated by dividing the hotel's RevPAR by the RevPAR of its:
- Brand average
- Competitive set (Correct answer)
- Market segment average
- National average
Correct answer: Competitive set
RGI compares a hotel's RevPAR directly to its competitive set's RevPAR to measure relative revenue performance.
Question 3: What does the Market Penetration Index (MPI) specifically measure?
- A hotel's RevPAR relative to its competitive set
- A hotel's occupancy relative to its competitive set (Correct answer)
- A hotel's ADR relative to its competitive set
- A hotel's TRevPAR relative to its competitive set
Correct answer: A hotel's occupancy relative to its competitive set
MPI measures how well a hotel captures occupancy share relative to its competitive set; an MPI of 100 means the hotel holds its fair share of occupancy.
Question 4: A hotel that achieves an MPI of 110 is best described as:
- Losing 10% of its fair share of occupancy
- Capturing 10% more than its fair share of occupancy (Correct answer)
- Operating at 110% occupancy
- Outperforming its competitive set by 10 percentage points in ADR
Correct answer: Capturing 10% more than its fair share of occupancy
An index above 100 means the hotel is outperforming its competitive set; an MPI of 110 indicates it captures 10% more than its proportionate share of occupancy demand.
Question 5: What is 'fair share' in the context of hotel competitive benchmarking?
- The industry average occupancy rate for the market
- The proportion of total competitive set supply a hotel represents (Correct answer)
- The average price a hotel should charge relative to competitors
- The minimum RevPAR needed to break even
Correct answer: The proportion of total competitive set supply a hotel represents
Fair share is the percentage of total room supply a hotel represents in its competitive set; if a hotel has 200 rooms and the comp set has 1,000, its fair share is 20%.
Question 6: The Average Rate Index (ARI) is calculated as:
- Hotel ADR ÷ Competitive set ADR × 100 (Correct answer)
- Hotel RevPAR ÷ Competitive set RevPAR × 100
- Hotel occupancy ÷ Competitive set occupancy × 100
- Hotel rooms sold ÷ Competitive set rooms sold × 100
Correct answer: Hotel ADR ÷ Competitive set ADR × 100
ARI equals the hotel's ADR divided by the competitive set's ADR, multiplied by 100, measuring rate performance relative to competitors.
Question 7: How many properties is a typical STR competitive set recommended to include?
- 2–3 properties
- 3–5 properties
- 5–10 properties (Correct answer)
- 10–15 properties
Correct answer: 5–10 properties
STR recommends a competitive set of 5 to 10 hotels to provide a statistically meaningful and representative benchmark while keeping the set focused on true competitors.
CHIA Competitive Intelligence & Benchmarking 1
In hotel benchmarking, what does the acronym STR stand for?