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Smith Travel Research (STR) is a recognized leader in providing information and analysis to the U.S. lodging industry. STRs importance to the industry is based on the fact that it "is widely regarded as having the most extensive database on lodging properties in the United States, and many other lodging analysts base their forecasts on STR data."1 STR's database, however, records self-reported data chiefly from chain hotels. STR acknowledges having considerably lower independent-hotel participation in reports to STR relative to franchise (chain) hotels,2 and the matter is further complicated by a debate over the definition of an independent hotel. Indeed, Rompf, who focused largely on small, independent hotels in South Carolina, cautioned against drawing inferences about key lodging operating ratios from STR's raw data.3 Given the high participation of chain hotels in the STR reports (and little debate over the definition of a chain hotel)4 we wondered how accurate are the STR estimates in the assessment of chain-hotel data.
Objectives and Data
In this study we compared tax data on chain-hotel room-nights sold to room-night estimates from STR's Historical Trend Report in an STR "tract" from January 1996 to October 2000.(5) Further, we attempt to explain the differences we found between the two data sources.
The city of Virginia Beach, Virginia, an oceanfront tourist destination, is the STR tract from which we drew our comparison data. Part of the Norfolk-Newport News-Virginia Beach MSA, Virginia Beach proper comprises roughly one-- third of the hotel rooms within the area. According to STR, in June 2000 the MSA had 34,321 hotel rooms and was ranked 29th in the United States in terms of total hotel rooms. In 2000 chain hotels (as defined by STR) in the city accounted for about 53 percent of the total hotelroom supply.
The city was selected for this project for two reasons. First, the city's geographical borders coincide exactly with the STR Virginia Beach tract. Second, the city offers an independent measure of room-nights sold, because it collects a dollar-- per-night occupancy tax from each hotel within its borders (in addition to sales and lodging taxes). The room-occupancy tax has been collected and data recorded monthly since September 1995. Under penalty of tax fraud, city hotels are required to report every room-night...