February 25, 2022
Hotels and Resorts companies have a DMI Index in the range of 26.06% to 122.43% with an average of 70.63%. The DMI Index calculation for hotels like Hilton, Marriott, Intercontinental hotels is based exclusively on the data valuation of their respective loyalty customer data and relies on publicly-available data sources only.
A higher DMI Index is generally preferable across companies and industries. By way of reference, internet companies have a higher DMI Index because most of their enterprise value is derived from data. For example, Google’s DMI Index is 93 percent because it generates most of its revenues from advertising based on user interaction data.
The YDC team recently published a DMI Index for major hotel & resort companies in the United States (see Table 1). The data valuation for Hilton, Marriott and InterContinental hotels includes the valuation of their more than 103 million, 120 million and 100 million loyalty members respectively.
The DMI Index is the value of a company’s data relative to Enterprise Value. Enterprise Value is a key metric used in the investment community and is calculated as equity value plus long-term debt minus cash. The Loyalty Data Valuation methodology uses Customer Lifetime Value (CLV), customer counts, loyalty membership, revenues, gross margin, average daily rate, visit frequency, churn rate, customer tenure and discount rates from publicly-available data sources only.
|Company||Enterprise Value||Data Valuation||DMI|
|Hilton Worldwide Holdings Inc.||$50,330,000,000||$30,666,551,705||60.93%|
|Marriott International, Inc.||$66,920,000,000||$48,928,401,883||73.11%|
|InterContinental Hotels Group PLC||$14,920,000,000||$18,266,178,420||122.43%|
Based on our analysis, the DMI Index for InterContinental Hotels is over 100% indicating that the value of the company’s data is higher than its Enterprise Value. We believe that InterContinental Hotels has an untapped data value of $8.2 billion (see Table 2).
|Average DMI Index for Hilton and Marriott||67.02%|
|DMI Index for InterContinental Hotels||122.43%|
|Difference between Average DMI Index and DMI Index for InterContinental Hotels (B – A)||55.40%|
|Enterprise Value for InterContinental Hotels||$14,920,000,000|
|Untapped Data Value for InterContinental Hotels (C x D)||$8,266,367,276|
Obviously, a number of factors will impact these estimates including a more precise calculation of Customer Lifetime Value (CLV), loyalty membership, and the companies’ stance on data privacy.