1. Hotel Industry Categorization Non- Geographic: The Scale Category
Module One - Part 3
Hotel Industry Categorization
Non- Geographic: The Scale Category

2. The “Scale” Category
The Scale category is one of the most popular ways the industry looks at different hotels.
There are 7 Scale categories, 6 for chain hotels ranging from Luxury to Economy, and 1 Scale category for all Independent hotels.
Exam Worthy!

3. U.S. Scales Luxury Chains 314 106,256 74.9% $306.03 $88.6B
Occ , ADR & Room Revenue –
12 Month Ending December 2014
Scale
Properties
Rooms
Occupancy
ADR
Room Avenue
Luxury Chains
314
106,256
74.9%
$306.03
$88.6B
Upper Upscale Chains
1,594
572,407
73.7%
$168.68
$25.9B
Upscale Chains
4,148
630,390
73.9%
$127.54
$21.3B
Upscale Midscale Chains
8,925
870,072
66.4%
$104.47
$21.9B
Midscale Chains
5,506
472,515
58.4%
$79.89
$8.1B
Economy Chains
10,255
781,270
57.5%
$56.18
$9.2B
Independents
21,294
1,476,825
60.7%
$113.68
$3.8B

4. How do Chains get grouped into Scales?
Chains are positioned in Scale groups based upon ADR, not upon subjective criteria such as features or amenities.
At the beginning of every year, STR subtotals all the hotels in the world by chain and calculates the average ADR per chain based upon the annual data for the prior year.
Chains are sorted by the ADR amount from high to low. Breakpoints are determined between the different Scale groups. These breakpoints may move up and down slightly from year to year.

5. Scales and Consistency
Exam Worthy!
Scales and Consistency
When a chain is categorized in a specific Scale group, that means every hotel in that chain is in that Scale group everywhere in the world, in every country and market.
For example, the Ritz-Carlton chain is in the Luxury Scale group. That means every Ritz-Carlton hotel in the world will be a Luxury Scale hotel.
For a second example, the Holiday Inn chain is in the Upper Midscale group. That means every Holiday Inn will always be an Upper Midscale hotel, even though in some parts of the world a single Holiday Inn might be much nicer than a typical Upper Midscale hotel.

6. U.S. Luxury = $306.03 ADR JW Marriott Ritz-Carlton Four Seasons
Grand Hyatt
Waldorf Astoria
Luxury Collection
St. Regis

7. U.S. Upper Upscale = $168.67 ADR Marriott Hilton Sheraton
Embassy Suite
Hyatt
Westin

8. U.S. Upscale = $127.54 ADR Courtyard Residence Inn Hilton Garden Inn
DoubleTree
Hyatt Place
Disney Hotels
Four Points by Sheraton
Vacation Condos by Outrigger

9. U.S. Upper Midscale = $104.47 ADR
Holiday Inn Express
Hampton Inn
Holiday Inn
Hampton Inn & Suites
Fairfield Inn
Aqua Hotels & Resorts

10. Quality Inn Best Western La Quinta Inns & Suites Ramada Red Lion
U.S. Midscale = $79.89 ADR
Quality Inn
Best Western
La Quinta Inns & Suites
Ramada
Red Lion

11. Days Inn Motel 6 Super 8 Howard Johnson Travelodge
U.S. Economy = $56.18 ADR
Days Inn
Motel 6
Super 8
Howard Johnson
Travelodge

12. Exam Worthy!
The “Class” Category
Class is used globally, but is especially popular outside of North America where there are more independent hotels.
The Class category is similar to Scale. The names of the categories are the same, but there is no “Independent” Class group. So there is only 6 Class categories, instead of the 7 Scale groups.
Independent hotels are slotted into the Scale categories (Luxury through Economy) at similar ADR levels.
Chain hotels are always in the same Class as Scale. So the Ritz-Carlton from before will always be in the Luxury Class group since it is in the Luxury Scale group.

13. Chain Hotels versus Independents – U.S. vs. Non-U.S.

14. Use of Class in the U.S.
Sometimes when analyzing data in the U.S., the Class numbers can provide a better perspective than Scale numbers.
Look at Markets such as San Diego, Miami and New York on the next slide.
Compare the number of Luxury and Upper Upscale hotels in the Luxury Scale versus the Luxury Class and what do you find?
When analyzing these markets, Class data can be more valuable than Scale data.

15. San Diego, CA Scale Properties Rooms Class Luxury Chains 7 3,123
Luxury Class 35
7,121
Upper Scale Chains 32
13,195
Upper Upscale Class 48
14,825
Upscale Chains 46
8,201
Upscale Class 73
12,089
Upper Midscale Chains 56
7,030
Upper Midscale Class 65
8,842
Midscale Chains 44
3,857
Midscale Class 69
5,514
Economy Chains 83
Economy Class
186
11,647
Independents
208
17,511

16. Miami, FL Scale Properties Rooms Class Luxury Chains 20 6,450
Luxury Class 46
11,931
Upper Scale Chains 23
6,371
Upper Upscale Class 74
11,360
Upscale Chains 40
6,383
Upscale Class 70
8,743
Upper Midscale Chains 32
4,354
Upper Midscale Class 62
6,995
Midscale Chains 17
2,262
Midscale Class 37
4,094
Economy Chains 27
3,233
Economy Class 99
6,773
Independents
229
20,843

17. New York, NY Scale Properties Rooms Class Luxury Chains 39 11,886
Luxury Class 65
16,938
Upper Scale Chains 59
25,716
Upper Upscale Class 96
31,779
Upscale Chains 77
17,627
Upscale Class
117
26,407
Upper Midscale Chains 94
12,219
Upper Midscale Class
124
16,515
Midscale Chains 35
3,029
Midscale Class 69
9,026
Economy Chains 34
2,936
Economy Class
155
12,276
Independents
288
39,528

18. Additional Non-geographic Categories
In addition to the Scale and Class categories, STR tracks several other non-geographic categories, including:
Location
Extended Stay
Boutique
Destination Resort
Additional Hotel Types
Hotel Ratings
Exam Worthy!

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