Hotel Revenue Glossary · Benchmarking

Fair Share

The proportion of total competitive set demand that a hotel would capture if all hotels in the set performed equally. For a 200-room hotel in a comp set with 1,000 total rooms, fair share is 20% of market room nights, ADR, and revenue.

Why it matters: Fair share is the baseline expectation. Performance indexes measure how far above or below fair share a hotel performs. An RGI of 100 means you are capturing exactly your fair share of market revenue — neither winning nor losing against competitors.

Worked example: Five hotels in the set, 940 rooms between them, 188 of them yours. Your fair share is 188/940 = 20.0%. The set sold 18,600 room nights last month, so your fair share was 3,720. You sold 4,050, which is an MPI of 4,050 / 3,720 x 100 = 108.9. Put another way, you took 330 room nights that, on a purely proportional split, belonged to somebody else. That is what an index above 100 actually means in rooms.

Common mistake: Forgetting that fair share shifts when supply does. A competitor adding 40 rooms takes the set from 940 to 980 and drops your fair share from 20.0% to 19.2%, so your MPI rises slightly on identical trading. Recompute the denominator whenever a property opens, closes rooms, or joins the set.

All glossary terms RGI (Revenue Generation Index) MPI (Market Penetration Index) Comp Set (Competitive Set)