For competitive sets in Europe and the Middle East/Africa, what is the minimum number of hotels required?

The minimum number of hotels required for competitive sets in Europe and the Middle East/Africa is established as four. This standard is set to ensure that the competitive set provides a meaningful comparison for performance metrics such as occupancy, average daily rate, and revenue per available room. A competitive set with four hotels allows for a more balanced perspective by mitigating the impact of outliers or anomalies that can skew performance metrics.

With three hotels, there is a risk that the comparison may not adequately reflect market dynamics or provide a comprehensive overview of competition. A set of only two hotels does not provide the necessary breadth for analysis, as it may rely too heavily on one entity's performance, leading to less reliable data. Setting the threshold at four helps to ensure a size that can better represent the competitive landscape, providing operators with insights that are actionable and reflective of true market competition.

In contrast, having five or more hotels can sometimes be too broad, leading to dilution of relevant comparisons, but it does maximize the dataset's robustness. However, the requirement for a minimum of four helps strike a balance between having sufficient data for meaningful analysis while still being focused enough to remain relevant for operators in the hotel industry.