A Good Hotel Is Not a Full Hotel With Jan Freitag

Jan Freitag is the National Director of Hospitality Analytics at CoStar Group, a global leader in commercial real estate information, analytics, and online marketplaces. He is a recognized hospitality data expert and works with CoStar's STR platform, whose benchmarking reports are widely used by hotel owners, operators, and investors to measure performance. Jan is a sought-after speaker and is frequently quoted by outlets including The Wall Street Journal, The New York Times, Bloomberg, and Forbes. He holds a bachelor's degree from Cornell University's School of Hotel Administration and an executive MBA from Vanderbilt University.

In this episode… Is a full hotel a good hotel? Not necessarily. Jan Freitag, National Director of Hospitality Market Analytics at CoStar Group, argues that a good hotel is a profitable hotel. Selling another room means another room to clean, staff, and maintain, while raising a $100 room to $110 turns that extra $10 into almost pure profit. Kin Sio sits down with Jan on The Lights On Podcast to break down how hotel owners can read STR data, benchmark against a comp set, and use forward-looking numbers to price with more confidence.

Jan starts with the basics, which he sums up as: we collect three numbers and we make three numbers. Hotels report supply (rooms available), demand (rooms sold), and rooms revenue for every day. STR turns those into occupancy, ADR, and RevPAR, and occupancy times ADR equals RevPAR. His advice for a new owner is to start with RevPAR against the same time last year, then work out whether the change came from occupancy or rate. The data gets really actionable once a comp set is added: if your RevPAR went up 4% and your competitors' went up 7%, you now have a question worth digging into. That is the conversation Jan says happens every Wednesday morning at 10 a.m. at nearly every branded hotel in America, with the revenue manager, head of marketing, GM, and maybe the head of front office in the room.

The occupancy trap is common among owners who come to hotels from residential real estate, where the goal is always to minimize vacancy. Kin points out that running at 90% plus brings more labor and wear on the property, while managing occupancy closer to 80 or 85% may let you charge a higher rate and make the same RevPAR with less work, if the property is worth it. Jan adds that some GMs deliberately target 73% to 75% occupancy, because that is where they can deliver the best guest experience, with short li