The Market Penetration Index (MPI) is a performance benchmark that measures how a property's occupancy compares to that of its competitive set, or comp-set. It is calculated by dividing your occupancy rate by the comp-set's occupancy rate and multiplying by 100. An MPI of exactly 100 means your occupancy matches the market average, a value above 100 means you are capturing more than your fair share of occupancy, and below 100 means you are underperforming on occupancy. MPI focuses solely on occupancy and is often used alongside related indices for average rate and revenue to give a fuller picture of competitive performance.
Why this matters for property managers
Comparing a property's occupancy against its competitive set separates a genuine performance problem from a soft market where everyone is down. A reading below the market signals that pricing, listing quality, or distribution is losing share to rivals, while a reading above it suggests room to raise rates without sacrificing nights. Watched over time, this index turns a raw occupancy number into a diagnosis of whether a property is winning or losing its fair share of demand.
Frequently Asked Questions
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