Market penetration index (MPI) compares your occupancy with the occupancy of comparable properties over the same dates. MPI = your occupancy ÷ market occupancy. An MPI of 1.00 (or 100 in hotel reports) means you filled the same share of your nights as the market. Above 1.00 means you filled more, and below means fewer. It is also called the occupancy index.
In hotels and in vacation rentals
- Hotels: MPI comes from STR (CoStar) STAR reports, comparing a hotel with a comp set of competing hotels and written on a base of 100. Mews’ example: 72% occupancy against a comp set at 80% gives an MPI of 90 (Mews).
- Vacation rentals: the “market” is a set of comparable listings (same area, bedrooms and quality tier) from a pricing tool or market data provider. Indices are often shown as decimals, so the same result is 0.90.
Formula
MPI = your occupancy ÷ market occupancy
Where occupancy = booked nights ÷ available nights, with owner and maintenance blocks excluded from available nights on both sides.
Index = yours ÷ market × 100. Above 100 beats the market. Some reports show it as a ratio: 95.3 is 0.953.
Worked example
An illustrative 3-bedroom house. In June it had 30 nights, with 2 owner nights blocked, so 28 were available. It booked 21 of them.
- Your occupancy = 21 ÷ 28 = 75%
- Market occupancy for comparable 3-bedroom homes in June: 68%
- MPI = 75 ÷ 68 = 1.10
The house filled 10% more of its available nights than comparable homes. Whether that is good depends on the rate it charged, which is why MPI is never read alone. Try it on your own numbers with the RevPAR index calculator.
Read MPI with ADR index
| MPI | ADR index | What it usually means | What to try |
|---|---|---|---|
| Above 1.00 | Below 1.00 | Filling nights by underpricing | Raise rates on far-out dates first; watch pace |
| Below 1.00 | Above 1.00 | Priced out of the market | Check pace 0-30 days; ease rate or minimum stay on soft dates |
| Above 1.00 | Above 1.00 | Outperforming | Check the comp set is right; test higher |
| Below 1.00 | Below 1.00 | Not a price problem | Check the listing itself: reviews, photos, minimum stay, availability |
MPI × ADR index = RevPAR index. An MPI of 1.10 with an ADR index of 0.92 gives a RevPAR index of 1.012: slightly ahead, but bought with discounting. See ADR and ADR index and RevPAR index.
Why booking window changes the answer
Monthly MPI looks backwards. For pricing decisions, measure MPI on future dates, split by how far out they are. Here is an illustrative portfolio on a single morning:
| Booking window | Your occupancy on the books | Market on the books | MPI |
|---|---|---|---|
| Next 14 days | 80% | 76% | 1.05 |
| Next 30 days | 70% | 64% | 1.09 |
| Days 31-60 | 48% | 40% | 1.20 |
| Days 61-90 | 30% | 24% | 1.25 |
A forward MPI well above 1.00 at 61-90 days, as here, can mean two things. Your listings genuinely attract early bookers. Or your far-out rates are too low and you are selling future peak nights cheaply. Check the ADR index on those forward bookings. If it is below 1.00, raise far-out rates. If it is at or above 1.00, you are winning early demand at a fair price.
A forward MPI below 1.00 only in the 0-14 day window, with healthy MPI further out, is usually fine. It means you filled early and have fewer nights left to sell late. More on this in booking pace and pickup.
Distortions to check before acting
- Long stays. One 30-night booking can push a listing’s MPI above 1.30 for the month. Flag listings where a single reservation is a large share of booked nights.
- Owner and maintenance blocks. If blocks are counted as available nights, MPI drops for reasons unrelated to price.
- Mismatched comp sets. Comparing a 4-bedroom house with an all-sizes market average will mislead.
- Small samples. A market built from fewer than about 30 comparable listings moves a lot from week to week.
What is a good MPI?
There is no universal target. Mews notes a good MPI “depends on your market, property type, season and commercial strategy” (Mews). For a vacation rental portfolio, a sensible goal is MPI near or above 1.00 together with an ADR index at or above 1.00. If your MPI is consistently above about 1.15 with an ADR index below 1.00, you are very likely underpriced. That last threshold is our rule of thumb, not an industry standard.
How we use MPI
Every morning our software calculates forward MPI for every listing across four booking windows. It checks for long stays, owner blocks and unverified rates, and gives each pricing recommendation a confidence score. Recommendations below a confidence of 70 go to manual review. A revenue manager approves every change before it goes live. If you’d like that check run on your portfolio, start with a free revenue audit.
FAQ
What does MPI stand for in hotels?
Market penetration index. It compares a hotel’s occupancy with its competitive set’s occupancy for the same period, on a base of 100.
How do you calculate MPI?
Divide your occupancy by the market’s occupancy for the same dates. 75% ÷ 68% = 1.10, or 110 on the hotel scale.
Is MPI the same as market share?
No. Market share is your share of the market’s total booked nights. MPI adjusts for size by comparing occupancy rates, so a 2-listing operator and a 200-listing operator can both have an MPI of 1.00.
What is the difference between MPI, ARI and RGI?
MPI compares occupancy, ARI (ADR index) compares rate and RGI (RevPAR index) compares revenue per available night. RGI = MPI × ARI ÷ 100 on the hotel scale, or MPI × ADR index on the decimal scale.
Can MPI be above 1.00 when occupancy is low?
Yes. If the market is at 40% and you are at 50%, your MPI is 1.25. MPI measures relative performance, not how full you are.
Related: ADR and ADR index · RevPAR index · Booking pace · Calculator · When to hire a revenue manager