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Revenue Management Glossary

Fair Market Share (FMS)


Fair Market Share (FMS) is a performance metric that is used to calculate how much of the “fair share” of the market a property is capturing. The Fair Market Share compares the property’s performance to the performance of all the properties within a market, based on available demand and its own capacity.

How to use it

Hotels use this metric to set performance goals, adjust marketing strategies to optimise bookings and revenue, and evaluate how their performance compares to that of the overall market. This metric is also used to helps management properly evaluate where a property stands and what operational strategies are necessary to maintain or improve their market position.


1 – Determine the Total Market Demand, which identifies the total room nights sold in the hotel’s destination during a set perios of time. 2 – Determine the hotel’s Market Share, which identifies the total room nights sold by the property, in the same time period, by dividing the number of rooms sold by the property by the total number of rooms sold in the market. 3 – Calculate the hotel’s Fair Market Share by dividing the total rooms sold at the hotel by the total number of rooms sold in the destination during the same period, and multuplying that number by 100 to obtain a percentage value.

Related Terms

Total Market Demand, Hotel Market Share, Market Penetration Index, Average Rate Index, Actual Market Share, ADR, RevPAR, Occupancy, Compset
I use the fair market share (FMS) metric to determine how competitive my hotel’s pricing is. If my hotel’s actual market share is higher than its fair market share, I know that it is outperforming based on the number of rooms the property contributes to the total market, which means that my revenue management strategies are a success. If my hotel’s market share is lower than its fair market share, I know that my property is underperforming, as it is not capturing the bookings it could potentially attract based on the size of the property; in that case, I know that I need to update my revenue management strategy to set more competitive rates in an attempt to drive more bookings and maximise my market share.

Gustavo Peña

Gustavo Pena