MPI (Market Penetration Index) is a hotel benchmarking metric that compares a hotel's occupancy with the occupancy of its competitive set over the same period. It shows whether the hotel is winning its fair share of the demand in its market. An MPI of 100 means the hotel is filling rooms at the same rate as its competitors; above 100 it is taking more than its fair share, below 100 less. MPI is usually read together with the Average Rate Index (ARI), which compares rates, and the Revenue Generated Index (RGI), which compares RevPAR.
What is MPI in hospitality?
In hotels, MPI stands for Market Penetration Index, also called the occupancy index. Benchmarking reports such as those from STR use it to show how well a hotel converts market demand into occupied rooms compared with the hotels it competes with.
How is MPI calculated in the hotel industry?
MPI = hotel occupancy / competitive-set occupancy × 100. Example: if a hotel runs at 80% occupancy in a month in which its competitive set averages 72%, its MPI is 80 / 72 × 100 = 111. The hotel has captured about 11% more than its fair share of occupied rooms. An MPI of 90 would mean it is 10% behind its competitors.
