Standards for performance comparison

Industry averages. When using industry averages, be careful to include only properties (markets) comparable in size, amenities, level of service, market orientation, age, and geographic location, if possible. Overall industry averages will include many kinds of properties (markets) that have little in common with any particular property (market), so those numbers will often reveal little of real use. But industry averages of comparable properties (markets) will provide an idea of how one property’s performance compares with its industry segment.

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Budget. If the hotel has budgeted for June with an expectation of 85 percent occupancy, an actual occupancy of 70 percent will likely call for investigation into the causes of the shortfall.

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Historical figures from comparable earlier periods. The past records of operation are crucial to have as a starting point of reference. If the hotel/market has had 80 percent occupancies in the previous two Junes, the 70 percent figure for this June may be problematic. But if the hotel’s/market's previous years’ figures for June were 50 percent and 60 percent, this year’s figure has quite a different meaning.

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