Revenue Management
Fair Share
The share of market a property would capture if demand split evenly by room count — the baseline the indices measure against.
Academic definition
Fair share is the proportion of market demand a hotel would expect to capture if demand were distributed across the competitive set strictly in proportion to room count. It is calculated by dividing the subject hotel's room count by the total rooms in the competitive set and expressing the result as a percentage. Fair share is the conceptual baseline underlying the penetration indices: an index value of 100 means a hotel is capturing exactly its fair share, while values above or below indicate it is drawing more or less than its size alone would predict. Capturing more than fair share signals competitive strength in rate, distribution, product, or demand generation; capturing less signals the reverse. Fair share assumes demand splits purely by capacity and so ignores differences in positioning, quality, and price that cause real demand to concentrate unevenly across a market.
Your Rooms = subject hotel room count · Total Compset Rooms = total rooms across the competitive set
Worked example
A 50-room hotel in a 500-room compset has a fair share of 50 ÷ 500 × 100 = 10% — its baseline claim on market demand before any competitive advantage.
The ProfitPAR™ lens
Fair share is an honest reference line, but "fair" is defined by room count, not by profit. A hotel can take more than its fair share of a market's rooms and still take less than its fair share of the market's profit, because the demand it captured arrived discounted and commissioned. The interesting question is not whether you are pulling above your size on volume, but whether you are pulling above your size on retained profit per room. ProfitPAR™ reframes the baseline: fair share of profit, not fair share of bodies. Outpunching your room count on occupancy is only an achievement if those extra rooms come home with their margin intact.
Fair share of rooms is not the same as fair share of profit.
Measure what each room actually keeps.
ProfitPAR is offered as a private revenue practice, by invitation. Tell us about your hotel to begin.
Request an InvitationWorked examples use illustrative figures in Indian Rupee (₹) with lakh/crore conventions. They are composite and representative, not drawn from any single property. ProfitPAR™ is a trademark of Sibasish Misra.