A “North Star” for hoteliers

Imagine you’re deciding whether to develop a new hotel or acquire an existing property. To choose the best option, you’ll need to know the competitive landscape of the hotel market in your geographic area, and you’ll want to see detailed statistics on current and historical trends.

Compiling that data on your own could be a difficult and timeconsuming endeavor. Fortunately, all of the information you need can easily be obtained through a Smith Travel Accommodations Report (STAR), widely considered the North Star for hoteliers.


Commonly referred to as a STAR Report, this publication is one of the most informative sources on hotels used by the global hotel industry. The data it provides is reliable and actionable.

STAR gives various options for end users to pull reports from two broad categories: Data providers and industry partners. Data providers are the hotel owners/ operators who use the reports for comparative analysis of occupancy, average daily rate (ADR) and revenue per available room (RevPAR). Industry partners are usually developers, investors, bankers, etc., who use the reports for a more analytical view of the hotel industry as a whole, such as trends or market demands for specific segments.

As a new/would be hotel owner or investor, there are a few options available in STAR that would enable you to analyze or understand the market. A Trend Report is such a tool, which shows the occupancy, ADR, RevPAR, supply, demand, and revenue for a selected set of hotels in the area. Other options include being able to retrieve pipeline reports for hotels at various stages of planning and a destination report which shows the same information but in a more concise manner with chosen regions, markets, and selected sets.


In this discussion, we will limit ourselves to a specific report called STAR Program, which tracks monthly, weekly, and daily data of a hotel’s performance against its competitive set (up to four sets). This report is usually available for existing hotel owners, but certain sections of this report are also available for new hotel developers and/or investors.


Under this section, you can examine the three main areas that drive the revenues of any hotel:

  1. Occupancy
  2. ADR (average daily rate)
  3. RevPAR, which is the occupancy times the ADR.

The report will show you the current month, year to date, trailing three months, and trailing 12 months.

The second half of the page will compare the current statistics with last year’s performance and the percent change. This data sets the stage for the initial forecasts of your property’s revenue potential.

The key takeaway here is that if the area shows high occupancy, above say 75 percent, and inclining ADR, the market could be ripe for adding hotel rooms. However, this is a desktop-level conclusion that then requires further onsite investigation.

Tab 3 STAR Summary

This is a replica of the STAR report and is intended for illustrative purposes only. Numbers and other information are not actual and are intended to illustrate how the report might be used.

The second and perhaps most important task of the STAR Report is the comparison of the subject property with that of the competitive set and the market segment in the U.S.

The comparison chart will list the occupancy, ADR, and RevPAR for the subject property, the market, the tract, and then the competitive set. Within the market and tract, the hotels are categorized as budget, midscale, mid- to upper-scale, upscale, luxury, etc.

The report will provide the occupancy, ADR, and the RevPAR for these levels. In addition, it will list the number of hotels in construction and in planning. This data is vital intelligence for drawing conclusions on development, acquisition, or disposition of a hotel.

The STAR Report will also show the total number of rooms in the market, tract, and competitive set. Finally, it goes into succinct detail about the supply and demand and the reliable percent change by month, by year, over the three months trailing, and 12 months trailing period.

Tab 4 Competitive Set Report

This is a replica of the STAR report and is intended for illustrative purposes only. Numbers and other information are not actual and are intended to illustrate how the report might be used.

Another tab of key significance is the comp tab. It lists the occupancy, ADR, and RevPAR for the subject property and the competitive set of properties for the full 12 months in the current year, then by year to date, running three months, and, finally, running 12 months.

If the tab reveals a trend of steady incline or decline, the market might be ready for change.

Lastly, the comp tab will show the subject property’s rankings in the tract or the market for your class of hotels.


You can gain insights into the key customer segments that may be driving the area by looking at the response tab, day of week and daily by month tabs

The response tab will compare the competitive set of properties to the subject property. The day of week and daily by month will outline in detail the occupancy, the ADR, and the RevPAR. These items are broken out by the days in a week, which allows you to identify the busiest days for the hotel and the competitive set.

Tab 6 Day of Week

If, for example, the property shows steady business Monday to Thursday and slower business Friday to Sunday, you can conclude the area is primarily business-driven. The opposite would show an area predominantly driven by leisure.

These tabs also provide insight into market penetration (MPI) and allow you to determine how much additional volume can be generated in the area.

Tab 7 Day of Week

This is a replica of the STAR report and is intended for illustrative purposes only. Numbers and other information are not actual and are intended to illustrate how the report might be used. All information are for illustrative purposes only. The figures and charts are replicas and not actual STAR report graphs or numbers.


The STAR report is one of the hospitality industry’s best tools. It is used by appraisers, lenders, current and would-be hotel owners, and investors to make assessments in both inclining and declining hospitality markets. For prospective hoteliers, it offers invaluable information for any acquisition, repositioning ground up development, or disposition.


Sundip Patel is the founder and CEO of AVANA Capital, a nationwide commercial real estate debt fund. AVANA offers hotel financing through conventional, bridge and SBA 504 lending programs for acquisition, refinance and construction. Since its founding in 2002, the company has funded more than $1 billion in loans and is known for its speed and certainty of execution. For more information, visit www.avanacapital.com.

Patel Sundip