An introduction to Custom Forecasts and their power in making hotel market projections
Our Custom Forecasts provide hotel owners, operators, investors, revenue managers and industry stakeholders with an approachable way to obtain top-line hotel market projections. Launched as an affordable alternative to major consultancies, they offer price points intended to be digestible even at the property level. While Custom Forecasts have grown exponentially year-over-year since their 2014 launch, many industry participants are still unaware that STR offers such a product. As such, we’ve compiled a high-level overview of how this product can benefit you, including a new addition for those already familiar with the product.
18-month and 5-year projections
Custom Forecasts are offered in both 18-month and 5-year formats, with the 5-year report providing only annualized projections in comparison to the monthly counterpart. A statistical methodology is used to prepare forward-looking projections, in which we apply industry benchmarks and indices, historical trends and local market dynamics to prepare top-line forecasts. Major market events and new additions to supply are also factored into our methodology.
It’s important to clarify that Custom Forecasts provide projections for client-defined competitive sets, not individual properties. That said, we can prepare a Custom Forecast for nearly any STR-compliant competitive set of properties.
Reports typically range in price from $850 to $1,250, depending on options selected (plus Trend fees, if applicable), and all Custom Forecasts include basic information about new supply, as tracked by the STR supply database and deemed competitive with the selected set. An example of the Monthly Forecast tab within the 18-month deliverable can be seen below (note that the forecast below was completed prior to the outbreak of COVID-19).
Comp Set Volatility Index launching in April 2020
We are excited to be rolling out the addition of the Comp Set Volatility Index to all 18-month U.S. Custom Forecasts for comp sets of 15 hotels or fewer. Launching in April, this will be featured on a separate tab included in our standard deliverable.
The Comp Set Volatility Index will provide users with metrics comparing the year-over-year growth rate volatility (for both ADR and occupancy) to the average volatility of: (i) all U.S. primary comp sets; (ii) the comp set’s dominant class; and (iii) the comp set’s market. The index was developed to help users understand how significant the year-over-year swings are for a given comp set with respect to rate and occupancy growth, relative to the aforementioned benchmarks. The new tab within the deliverable will look like this: