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In the Hospitality Industry, all hotels should strive to capture maximum revenue at all times. And, sometimes, comparing revenue levels with other hotels can provide a valuable insight. This can help to establish a hotel’s Market Share: the percentage of business it is getting within the hotel market overall.

A hotel should try to discover how it is performing in comparison to other neighbouring hotels, and even to several hotels within a (or ‘comp set’), to gain a wider perspective. Based on this knowledge, they can consider how to perhaps adjust their business strategy, to improve performance and work towards maximising revenue more efficiently.

The key question a hotel’s team should ask, after studying and analysing the findings collated and compiled into a comp set research , is: “Are we really satisfied with our market share?”. The share can be established quickly by performing a simple calculation:

The actual percentage of the room nights sold or revenue captured during a particular timeframe, for example: Easter, Christmas, the summer season, or the peak skiing season, e.g. divided by the total room nights or revenue sold within the competitive set (inclusive of the subject hotel).

Formula:

Market Share = revenue sold at the hotel / revenue sold within competitive set

Calculation:

Market Share =  5000 / 14500= 34%

See also:

Synonyms

  • Hotel Market Share

Categories:

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