Your Hotel Ran 75% Occupancy Last Month. Is That Good?

A note for owners and GMs who get a monthly number and aren’t sure what to feel about it.

The month closes. Occupancy: 75%. Is that a good month?

It’s a trick question — not because the answer is complicated, but because the number alone cannot contain it. If the market around you ran 62%, your 75% is a genuinely strong result. If the market ran 88%, your 75% means the demand was there and a disproportionate share of it slept somewhere else. Same number, opposite verdicts.

Absolute numbers describe you. Performance is a comparison. This article is about making the comparison correctly — in plain language, without drowning in index acronyms.

The three questions hiding inside “is it good?”

When an owner asks whether a month was good, there are actually three comparisons available:

1. Against your own past. Was this July better than last July — measured at the same point, so the comparison is fair? Most hotels do this one instinctively.

2. Against your plan. Did the month land where the budget said it should? Fewer hotels do this consistently, but the discipline exists.

3. Against your market. Did you capture your fair share of the demand that actually showed up? This is the comparison most independent hotels never make — and it’s the only one of the three that can tell you whether 75% was a win.

The first two comparisons share a weakness: they can both look great in a strong market and terrible in a weak one, for reasons that have nothing to do with how well the hotel was run. The market comparison is what separates your performance from the tide.

Fair share, in plain language

Suppose your hotel has 80 rooms, and you plus your compset total 800 rooms. Your fair share of the market is 10% — if demand were distributed evenly by size, one room night in ten would be yours. Capture more than that and you’re punching above your weight; less, and someone else is sleeping your guests.

Three indexes express this, and they’re simpler than their acronyms suggest:

• MPI — Market Penetration Index: your occupancy vs the market’s. Are you filling more or less of your hotel than the market fills of theirs?
• ARI — Average Rate Index: your ADR vs the market’s. Are you getting paid more or less per room?
• RGI — Revenue Generation Index: your RevPAR vs the market’s — the one number that sums it up, because it combines both.

For each: 100 means par. Above 100, you’re outperforming your fair share; below, underperforming.

The insight worth pinning on the wall is what the pairs mean. High MPI with low ARI usually means you’re buying occupancy with rate — full house, thin money. Low MPI with high ARI means you’re holding rate and losing heads. Neither is automatically wrong — but it should be a strategy you chose, not a pattern you discover. RGI is the referee: above 100, your revenue strategy is beating the market’s, whichever mix it uses.

The 75%, worked through

Two illustrative months, same hotel, same 75%:

Scenario A — market ran 62%. Your MPI is 75 ÷ 62 ≈ 121. If your rate held at or above the market’s, your RGI is comfortably over 100: you out-earned your fair share in a soft month. That 75% deserves the celebration it probably didn’t get.

Scenario B — market ran 88%. Your MPI is 75 ÷ 88 ≈ 85. The demand came to town and disproportionately booked past you. If you were also discounting to get to 75%, ARI is under 100 too, and the “decent month” was a double miss dressed as a result.

Without the market number, these two months produce the same board slide. With it, they produce opposite conversations — and opposite next moves.

Where market data comes from

The honest options, in ascending order of usefulness:

The compset phone-around. Informal, occupancy-only, and everyone rounds up. Better than nothing; nowhere near decision-grade.

Industry benchmark reports. Paid subscriptions that report market-level occupancy and rate. Solid where coverage is good — typically monthly, backward-looking, and at city rather than true-compset granularity.

Platform-integrated anonymous benchmarking. The newer pattern, and (disclosure) the one we build: hotels on the same platform form anonymous peer pools — matched by country, stars, type — and each sees its numbers against the pool’s average, median, and spread, plus rank and percentile. The privacy rules do the heavy lifting: never a named competitor, a three-hotel minimum before any pool value appears, opt-in you can revisit. And because it runs on live data, it can look forward — your next three months against the pool’s, built from confirmed bookings rather than last year’s guess. Backward-looking benchmarks tell you what you missed; a forward view tells you while you can still act.

Whichever source you use, the point stands: some market reference beats none by a wide margin, because it’s the only way to separate your decisions from the tide.

If you truly have no market data

Second-best baselines, honestly ranked: your own same-point last year comparison (normalizes seasonality and booking rhythm — the fairest self-comparison there is), budget variance (tests the plan, not the market), and competitor rate positioning as a weak demand proxy (visible, but it tells you what they ask, not what they sell). Useful, all three — and all blind to what the market actually did last month. Treat them as the interim setup, not the destination.

When the benchmark misleads

Market comparison has failure modes, and pretending otherwise would undercut the point:

• Wrong peer group. A resort benchmarked against city hotels produces beautifully precise nonsense. The pool must share your demand patterns, not just your star count.
• Small pools and outliers. One unusual property can drag a small pool’s average; medians and spreads are more honest than a single average line.
• Managing the index instead of the revenue. MPI can always be bought with rate. The goal is revenue; the indexes are instruments. An RGI above 100 with an MPI below it can be a better month than the reverse.
• Structural years. Renovation, rebrand, a new competitor opening — years when your comparison base shifted. Annotate them, or future-you will misread the chart.

Where to go from here

The glossary has the plain-language entries for MPI, ARI, and RGI, with the formulas and the traps. The Benchmark page shows what the anonymous peer comparison looks like in practice — it’s included with every plan, so if your hotel runs on Peaqplus, the market view is an opt-in away.

And if the broader question is “which comparisons is my hotel missing?”, the Self-Assessment Quiz locates you in five minutes. Market indexes are one lens of several — the hotel data analytics guide puts them alongside pickup, pace, and the rest of the toolkit. And when the verdict comes back “behind,” how to increase RevPAR is the lever-by-lever answer — with how to increase hotel occupancy covering the demand side specifically.

75% is a number. “Good” is a comparison. Before the next monthly review, make sure you know which one is on the slide.