STAR report: Beginners guide on how to read STR reports

What is the STAR report?

The STAR report (aka STR report) is a benchmarking tool used by hotels to measure their performance against competitors and industry averages.

As a small, independent hotelier, you might be looking for a bit more of a hotel star report explanation. It is not, as the name might suggest, a report on the star rating of your hotel. Rather, the report collates and analyses vast amounts of hotel industry data, then repackages that information as insights for hotels.

What does STR stand for in hotels?

The ‘STAR’ in ‘STAR report’ is an acronym that stands for “Smith Travel Accommodations Report”. The report is (somewhat confusingly) offered by STR Inc. And what does ‘STR’ mean on a property report? It stands for “Smith Travel Research”, so the STAR report is also often referred to as the STR report.

In this article we’ll look beyond simple STAR report hotel definitions. On top of answering “what is a star report for hotels?”, we’ll reveal how to obtain a hotel industry STAR report, how to read a STAR report, and how such a report might help a small, independent hotel.

Why should small hotels use the STAR report?

STR Inc is the global benchmark for hotel data. And through the STAR report, you gain access to the most relevant information for your hotel, delivered in easy to digest insights.

The insights offered by STR aren’t just market trends – they are customised to your hotel, so offer deep help with strategic decision-making. They can help you understand where your hotel sits against its competitors, identify travel trends early, and make better, more informed business decisions that are backed by data.

Knowledge is power, and with the STAR report, knowledge is exactly what you get.

How to obtain an STR report in the hotel industry

How do I pull a STAR report? If you’re wondering how to get a STAR report for hotels, you will typically need to follow these steps to obtain a STAR report:

1. Register with STR: Sign up with STR through their website (you may need to kick things off by requesting a demo).
2. Submit hotel data: STR will ask you to provide data on KPIs like occupancy rates, average daily rates (ADR), and revenue per available room (RevPAR).
3. Select your competitors: Choose a competitive set to compare your performance against.
4. Receive your reports: Depending on your subscription, you’ll receive benchmarking reports on a daily, weekly or monthly basis, which can either be sent via email or viewed through STR’s online portal.

How to analyse a STAR report for small hotels

By properly analysing your report, you put yourself in a position to make better, data-driven decisions that improve your hotel’s market position and overall profitability. Here’s how to do it.

Step 1: Identify key metrics

The most important performance indicators include occupancy, average daily rate (ADR), and revenue per available room (RevPAR) – more on those below – as these provide precise insights into how your hotel is performing versus your competitors.

Step 2: Review your performance vs your competitors

Compare your metrics against those of your competitors. The STAR report’s indexed numbers make this easier – a score of 100 means your hotel is on par with competitors, >100 you’re doing better, <100 you’re doing worse.

Step 3: Analyse segments, market conditions and historical trends

Find the ‘why’ behind your numbers. Break the data down into segments – weekdays vs weekends, individual guests vs groups – to pinpoint the guests and times that are making or breaking your business. Use data on the market averages for key metrics to understand external factors like seasonality, trends and economic conditions. Look at historical numbers to understand how trends are changing over time, and how your hotel should respond to these changes into the future.

Step 4: Draw conclusions

Based on your findings, assess your hotel’s strengths (e.g. outperforming in RevPAR) and the areas where improvements may be needed (e.g. lower occupancy index).

Step 5: Formulate action plans

Using the insights you’ve garnered, develop strategies designed to improve performance. How do you craft effective strategies as an independent hotelier? Let’s take a closer look at a few key metrics to find out.

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Devereux Residences

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Key metrics in a hotel STAR report

There are three STAR report metrics that matter more than most to independent hoteliers: occupancy rate, ADR and RevPAR. With the help of a few hypothetical STAR report examples, here are some simple strategies that can help to turn STR insights into action.

Metric #1: Occupancy rate

Occupancy rate is the percentage of rooms occupied on your property at a given time.

Example strategy: Your occupancy rate is 10% lower than your competitor set. To boost occupancy, you could offer limited-time discounts, work hard to enhance the guest experience, or target corporate travellers to attract more bookings during mid-week and off-peak periods.

Metric #2: Average daily rate (ADR)

Average daily rate (ADR) is the average revenue earned for an occupied room on a given day.

Example strategy: If your ADR is higher but your occupancy is lower than that of your competitor set, you could review your pricing strategy, lowering rates slightly to attract more guests and increase total revenue.

Metric #3: Revenue per available room (RevPAR)

Sitting between occupancy and ADR, RevPAR measures your hotel’s ability to fill available rooms at an average rate. How are hotels compared on the STAR report for RevPAR? While RevPAR is usually represented in a dollar or currency figure, STR indexes your RevPAR to 100, as outlined above, to make it easier to compare your performance against your competitors.

Example strategy: Your RevPAR is lower than the market average, even with decent occupancy. This suggests your room rates are too low. Carefully increasing your rates in a way that maintains strong occupancy can help you to maximise overall revenue.

Data is an independent hotelier’s most powerful weapon, and the STAR report is a fantastic way to access the most important numbers. But if you’re a Little Hotelier user, you may already have access to all the information and analytics you could ever need.