What is the meaning / definition of Market Share in the hospitality industry?

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

A should try to discover how it is performing in comparison to other neighbouring hotels, and even to several hotels within a competitive set (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 more efficiently.

The key question a ’s management team should ask, after studying and analysing the findings collated and compiled into a comp set research report, 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 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

Calculation:

Market Share =  5000 / 14500= 34%

See also:

  • Market Penetration Index
  • Revenue Generation Index

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