Definition
Market share refers to the percentage of demand or sales a hotel captures within its market compared to its competitors.
In hotel revenue management, it is often analysed in relation to metrics such as occupancy, revenue or bookings against a compset or the wider market.
Why it matters
Understanding your market share helps to:
- Assess your real position in the market.
- Identify whether you are gaining or losing demand versus competitors.
- Spot growth opportunities or competitive gaps.
- Put internal metrics like occupancy or ADR into context.
It’s not just about how much you sell, but how much you sell relative to the market.
Practical example
If the market grows by 10% in bookings and your hotel only grows by 2%, you are losing market share — even if your absolute sales have increased.
Clarification: market share vs MPI
Although closely related, they are not the same:
- Market share → The concept
(the portion of demand you capture within your market or compset). - MPI (Market Penetration Index) → The measurement
(compares your occupancy against the average occupancy of your compset).
In short:
👉 Market share answers “how much of the market am I capturing?”.
👉 MPI answers “am I capturing more or less than my fair share?”.
- MPI > 100 → You are gaining market share.
- MPI = 100 → You are in line with the market.
- MPI < 100 → You are losing market share.
