Hotel Room Inventory Management -MPI

hotel Room Inventory and Control management:market penetration index(MPI)

index

Map

introduction

Activity

Calculation

Why it matters

TEAM

Example

NUMBERS

01

introduction

market penetration index (MPI)

The MPI, also referred to as an Occupancy Index, is a key comparative metric from the Smith Travel Accommodations Report, one of the industry's most important reports. The majority of hoteliers refer to is the "STR Report." MPI gives a comparison of the market share of your hotel in your market to that of your competition, showing you an overview of your share of the total occupancy rate of the market. This is calculated by dividing your hotel’s occupancy rate by that of your competitor set and multiplying the result with 100. Any number below 100 would indicate that you are not getting your fair share of the demand of your market and any number over 100 implies that you are doing an exceptional job and potentially stealing business from your competition. MPI is the first metric in the industry that indicates how you are performing relative to others. MPI= Hotel Occupancy % / Market Occupancy %

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Calculation

Calculation

MPI= Hotel Occupancy % / Market Occupancy %

03

Why does this metric matter?

Why does this metric matter?

• The metric acts as a reference for recognizing the superiority and demand of a hotel in the industry. Growing demand leads, of course, to more revenues.
• A fantastic tool to be used when considering your pricing against that of your competitors (when relative to the occupancy rate). By measuring your MPI, you will put yourself in the competition and from there make competitive pricing decisions.

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Example

A hotel’s occupancy is 80% and that of competitive set is also 80%. To calculate MPI of the hotel; MPI= Hotel Occupancy % / Market Occupancy % (80%/80%)*100 MPI= 100 Assuming the hotel’s occupancy is 96% and competitive set is also 80%. To calculate MPI of the hotel; MPI= Hotel Occupancy % / Market Occupancy % (96%/80%)*100 MPI=120 That means that the hotel is doing well as it has more than its expected share.

Example

Example

Assuming the hotel’s occupancy is 64% and competitive set is also 80%. MPI= Hotel Occupancy % / Market Occupancy % (64%/80%)*100 MPI=80 That means that the hotel is not doing well as it has less than its expected share.

05

activity:Please answer the questions on wooclap

questions

Please read the provided reports and come up with your hotel's MPI for the simulation game.Create some slides showcasing your hotel's MPI.

THANK YOU!