How to Read a STR Report (Hotelier Step-by-Step) - Hotel ...

Let's rewind a bit; what exactly is a STR report? Developed by the hotel management analytics firm Smith Travel Research, the STR report is a ... HowtoReadaSTRReport(HotelierStep-by-Step) HowtoReadaSTRReport(HotelierStep-by-Step) By HotelTechReport LastupdatedMarch01,2022 6minread BusinessIntelligenceSoftware MarketIntelligenceSoftware RevenueManagement RevenueManagementSystems STRstandsforSmithTravelResearch,ahospitalityanalyticsfirmfoundedin1985. STRwasrecentlyboughtbyrealestatedatafirmCoStarGroupforamassive$450Mallcashdeal. ButwhatdoesSTRdo? STRhasageniusmodelwherehotelspayamonthlyfeetoseecompetitordatalikeoccupancyrates,RevPARandADR. ThegeniuspartofSTR'smodelisthatthesehotelcustomersalsocontributetheirownperformancemetricswhichSTRthenpackagesandresellstocompetitorsandinvestors. EveryTuesdaySTRcustomersreceivea"STRReport"showingtheirhotel'sperformanceagainstalocalcompsetsotheycanseehowthey'redoingonarelativebasis. STRalsopackagesthisdataforinvestors,hoteltechcompaniesandotherindustrystakeholders. Ifyouhaven'tseenaSTRreportwe'llwalkyouthroughwhatonelookslike. ForthoseofyouwhogetSTRreports,haveyoueverlookedataSTRreport(pronouncedStarReport)andfeltlikeyouweretryingtoreadadifferentlanguage?Betweenallthehotelindustryacronymsandnumbers,it’seasytofeelalittlelost.Inthisarticle,we’llsharesometipsonunlockingthetreasuretroveofdatawithinyourSTRreportwhetherhotelbusinessisinNorthAmerica,EuropeorAsiaPacific. STRreportsarenottobeconfusedwithhotelstarratings,theyhelpusunderstandfinancialperformanceofanassetratherthanguestsentiment. OnceyoucanreadaSTRreport,youcanapplyyourknowledgeaboutyourhotelmarketscompsetandmarkettrendstoyourownhotel’sstrategy,whichwillhelpyoumeetyourrevenueandoccupancygoals.ButtheSTRreportisn’ttheonlytoolyoucanusetotakeyourhotel’sperformancetothenextlevel.  Onceyou’vemasteredthisone,you’llwanttodiveintomoredetailedreal-timedatafromabusinessintelligencesolution,suchasRevenueInsight,oraliverateshoppingtoollikeRateInsight.   WhatisaSTRReport? Let’srewindabit;whatexactlyisaSTRreport?DevelopedbythehotelmanagementanalyticsfirmSmithTravelResearch,theSTRreportisabenchmarkingtoolthatcomparesyourhotel’sperformanceagainstasetofsimilarhotels.ThereportisusuallyreleasedeveryTuesdayandisdeliveredinadigitalformat,thoughyoucanalsoreceivereportsonamonthlyoryearlybasis.InordertoreceiveyourSTRreport,hoteliersmustsubmitperformancedata(likedailyoccupancyandADR)toSmithTravelResearch,whothencompilesallofthedatatheyreceiveintothenicelypresentedSTRreports. Youcanfindyourownhotel’sdatainyourpropertymanagementsystem,sotherealadvantagetolookingataSTRreportisunderstandinghowyourhotelisperformingagainstotherproperties.Todothis,STRusesanonymizeddatafromyourcompetitiveset,whichisagroupofhotelsthatyouchooseforcomparisonpurposes.We’lltalkmoreaboutchoosingacompsetbelow. TheSTRreportusesavarietyofmetricstoshowperformancedata.Hereareafewofthemaintermsthatyou’llseethroughoutthereport: Occupancy=RoomsOccupied/TotalNumberofRooms.Occupancyisexpressedasapercentage,like78%. ADR(AverageDailyRate)=TotalRevenue/NumberofRoomsSold.ADRistheaverageroomratesoldforagiventimeperiod. RevPAR(RevenueperAvailableRoom)=TotalRevenue/TotalNumberofRooms.RevPARcanalsobecalculatedasADRxOccupancy. You’llalsoseeyourhotel’sperformancecalculatedasanindex,whichshowsyouwhetheryourhotelisperformingbetterorworsethanaveragewithinyourcompetitiveset.Anindexiscalculatedbydividingyourhotel’sdata(occupancy,forexample)bythecompetitiveset’sdata(theaverageofallthecompetitiveset’soccupancynumbers),thenmultiplyingby100.Ifyourhotelscoreshigherthan100,thenyou’reoutperformingyourcompset,orcapturingmorethanyourfairshare.Ifyourindexisbelow100,thenyou’renotearningyourfairshareandhavesomeroomtoimprove.   SelecttheOptimalCompset InorderfortheSTRreporttoproviderelevantinformation,youneedtoselectan appropriatecompetitiveset.HotelmanagementteamscaneasilygettrickedbyaSTRReportiftheyhavepickedthewrongcompset.Youshouldpickacompsetthatmostcloselyresemblesyourhoteltype.Astrongcompsetshouldinclude3to5hotelswiththefollowingcharacteristics: Locatedwithinthesamegeographicalarea(exceptionscouldbeforhotelslocatedinveryremoteareasorcertainairporthotelswhichcompetewithdifferentmarkets) Sellingsimilarrates Offeringsimilaramenities Targetingthesametypeofguests(forexample,anextended-stayhotelwouldwanttoincludeotherextended-stayhotels) Keepinmindthatyoucanalwayschangeyourcompetitiveset,soit’sokayifyourfirstiterationisn’tperfect.   HowtoReadaSTRReport Onceyou’vechosenasolidcompetitivesetandhavereceivedyournewreport,it’stimetodiveintothedata.Butwithsomanynumberstolookat,wheredoyoustart?We’llexplainafewstrategiestoreadingaSTRreporteffectively,likelookingfortrends,comparingyear-over-yearnumbers,andtakingnotessoyoucangetthemostoutofthereport. Lookfortrends Let’sstartonthe“Glance”sheet,whichfollowstheTableofContents.Onthissheet,you’llseeoccupancy,ADR,andRevPARbrokendownbyeachdayinthelastweek.There’sarowforyour,yourcompset,andyourindex.Again,iftheindexnumberisover100,you’redoingbetterthanyourcompsetaverage,andifit’sbelow100,youcanroomtogrow.Bytakingaquicklookatthissheet,youcaneasilyseeifyourindexesareaboveorbelow100,ingeneral,aswellasifyourperformancechangedpositivelyornegativelyoverthelastweek.Whattrendsdoyousee?Isyourperformanceupordown?Howaboutyourcompset?Isaparticulardayofweekperformingbetterthanothers? Comparetolastyearandtrytomakeinferences Lookingatthepercentchangecomparedtolastyearcanalsoprovideinsightintoyourperformance.BylookingattheRevPARtotals,youcangetaquicksnapshotintoyourhotel’sandyourcompset’syear-over-yearperformanceforthatweek.Didtheweekperformbetterthanlastyear?Orworse?Andwasyourperformanceinlinewiththecompsetordifferent?Thinkaboutwhythatcouldbe,perhapsaspecialeventhappenedlastyearthatdidn’treturnthisyear,ormaybeseveralnewhotelsopenedintheareawhichwouldleadtoloweroccupancyoverall. Onsubsequentsheetsyoucanexplorefurtherintoyouryear-over-yeartrendstopinpointwhichmetricswereaffected.Forexample,maybeyouroccupancystayedthesame,butyourADRdecreased.Whenyoulookonyour“SegmentationataGlance”sheet,youmightnoticethatyourgroupsegmentgrewwhileyourtransientsegmentdecreased.SincethetransientsegmentgenerallyhashigherADRthangroup,thatmightexplainwhyyourADRwasdownoverall.Knowingthis,youcouldstarttobrainstormstrategiestoattractmoretransientguests. Takemeticulousnotesinyouranalysissothatyoucantracktrendsovertime AsyoustudyyourSTRreport,werecommendtakingalotofnotesaboutyourobservationsandexplanations.Youmightaddnotesaboutagroupbookingthatcancelledlastminuteasacauseforlowoccupancynumbers,ormaybeahotelnextdoorhadapoweroutageandyoureceivedalotofunexpectedbusinessthatledtohigherRevPARonaparticulardate.Ayearfromnow,whenyouwonderwhyyouryear-over-yearnumberslookthewaytheydo,youcanlookbackandthankyourselffortakingdetailednotes! WhiletheSTRreportsharesalotofvaluabledata,it’spurelyquantitative.Ittellsusthe“what”butnotthe“why.”Toreallyunderstandwhat’shappeninginyourhotel’sperformanceandthemarket,you’llwanttodigintothe“why”behindthedata.CouplingyourfindingsfromyourSTRreportwithinsightfromabusinessintelligencetoolorarateshoppercanhelpyoudevelopmoreeffectivestrategiestocaptureevenmoreofyourfairshare.   STRShowsthe"What"andBusinessIntelligenceShowsthe"Why" There’sareasonwhySTRreportsaresopopular,butit’simportanttorememberthattheydon’talwaystellthecompletestory.Arevenuemanagershouldhavemoretoolsinhisorhertoolboxtointerpretdata,suchasbusinessintelligencesystemandrateshoppers,tofurtherexplaintheinformationthataSTRreportprovides. STRisabletogatheruniqueproprietarydatadirectlyfromhotels Abusinessintelligencetoolthatpullsinformationfromyourpropertymanagementsystemcanbethekeytounderstandingyourhotel’sperformance.WhenyouuseaBItoollike HotelIQ alongsideyourSTRreport,yourSTRnumberswillmakemoresensewithinthecontextofyourhotel’sfullperformancedata.Forinstance,youcanpullupyourcurrentpromotionperformance.Maybethisyear’sholidayemailcampaigndidn’tseeasstrongofresultsaslastyear’s,sothatcouldbethereasonwhyyourDecemberoccupancywaslowerthanlastyearintheSTRreport. Arateshoppercanalsoprovidevaluableinformationaboutyourcompsethotels-inreal-time.There’snoneedtowaitaweekuntilthenewSTRreportcomesout;ifyounoticethatyourhotelislosingoccupancytothecompset,youmightwanttoseeexactlywhatratesyourcompsethotelsareselling.Maybeonehotelisrunninganaggressivepromotionthat’scausingguestswhomighthavestayedatyourhoteltostayatthehoteldownthestreet. AgoodrevenuemanagerknowshisorherwayaroundaSTRreport,butagreatrevenuemanageruncoversinsightsfrommultiplesourcestopaintaholisticpictureanduncovertrends.ByreadingaSTRreportandstudyingthetrendsandyear-over-yearchanges,thencomparingthedatatoyourownpropertyperformancewithaBItoolorcompsetrateswitharateshopper,youcantakeyourrevenuemanagementstrategytothenextlevel.   WanttolearnmoreaboutreadingandanalyzyingSTRReports? 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