How to Determine Market and
Fair Share
• In assessing competition, a worthwhile
exercise is to calculate your fair share and
your market share against that of the
competition.
• First step is to set up a table for competitive
properties showing property size in rooms,
occupancy percentages, and the room nights
sold for each.
Area Demand Analysis
# of Rooms % Occupancy Room Nights Sold
Your Hotel
Hotel A
Hotel B
Hotel C
Hotel D
Total
500
350
275
300
547
1,972
67
73
75
75.5
69
71%
335
256
206
226
377
1,400
Market Share Calculation
• Actual market share refers to the amount of
room nights sold by your hotel relative to
the total room nights sold by you and your
competitors.
• It can be calculated for your hotel:
Market Share =
Property Room Nights Sold
= 335 = 23.9%
Total Market Room Nights Sold
1,400
Area Demand Analysis: Market Share
# of Rooms
% Occupancy Room Nights Sold Market Share
Your Hotel
500
67
335
Hotel A
350
73
256
Hotel B
275
75
206
Hotel C
300
75.5
226
Hotel D
547
69
377
1,972
71%
1,400
Total
23.9%
100%
Area Demand Analysis: Market Share
# of Rooms
% Occupancy Room Nights Sold Market Share
Your Hotel
500
67
335
23.9%
Hotel A
350
73
256
18.3%
Hotel B
275
75
206
14.7%
Hotel C
300
75.5
226
16.2%
Hotel D
547
69
377
26.9%
1,972
71%
1,400
100%
Total
Fair Share Calculation
• Fair share refers to the amount of room
nights a property would sell if demand were
distributed evenly based on the number of
rooms among all properties. It is calculated
as follows:
Fair Share =
Property Available Room Nights = 500 = 25.4%
Total Market Available Room Nights 1,972
Area Demand Analysis: Fair Share
# of Rooms
% Occupancy Room Nights Sold Fair Share
Your Hotel
500
67
335
Hotel A
350
73
256
Hotel B
275
75
206
Hotel C
300
75.5
226
Hotel D
547
69
377
1,972
71%
1,400
Total
25.4%
100%
Area Demand Analysis: Fair Share
# of Rooms
% Occupancy Room Nights Sold Fair Share
Your Hotel
500
67
335
25.4%
Hotel A
350
73
256
17.8%
Hotel B
275
75
206
13.9%
Hotel C
300
75.5
226
15.2%
Hotel D
547
69
377
27.7%
1,972
71%
1,400
100%
Total
Summary of example
In this case, your hotel is not capturing its fair
share of the market since it’s market share is
falling one and a half percentage points under the
fair share calculated for it. Market share and fair
share computations are measures of success
relative to competition. The absolute size of the
share may or may not be important, but it is useful
when measured over time to determine trends in
market share and the impact of various marketing
strategies.
What is the difference
between Objectives,
Strategies and Tactics?
Objective
• A desired end-state.
• i.e. Increase the restaurant’s
lunch-time meeting business.
Strategy
• A broad direction for a
company to proceed in to
achieve a goal.
• i.e. Promote and advertise more
to small businesses in the area.
Tactics
• The step-by-step procedures to
implement a strategy.
Advertise in newspaper.
Host open houses.
Acquire list of businesses.
The Mission Statement
• A company’s mission is used to
ensure unanimity of purpose within
an organization and also to set it
apart from other organizations of
its type.
The Mission Statement (cont.)
• It’s a statement of attitude, outlook,
and orientation rather than details.
• It’s a starting point for all
marketing plan.
• It dictates all action plans.
Criteria of an Effective
Mission Statement
• 1. It states what business the company
is in, or will be in. It goes beyond the
specific industry and states how we
serve our customers.
• 2. It identifies the special competency
of the firm and how it will be unique in
the marketplace.
Criteria of an Effective Mission
Statement (cont.)
• 3. It identifies the needs of its
constituents and who they are.
• 4. It identifies the future or long term
major goal of the company.