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# Lesson 4 · LY, STLY and budget
Lesson 4 — LY, STLY and budget answer 3 different questions. Pick the wrong one and a healthy month looks like a disaster.
{% hint style="info" %}
**In this lesson.** You will be able to explain the difference between LY and STLY, choose the right comparison for the question you are asking, and avoid the 2 mistakes that make good months look bad. **About 25 minutes.**
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## Why you always need a comparison
You hold 23 rooms for 15 August. Is that good?
You cannot answer. No number in revenue management means anything until you say *compared with what*. Revhero gives you 3 comparisons, and they answer 3 different questions.
*LY looks at last year's result. STLY looks at last year's position on this same day. Budget looks at the promise you made.*
## The 3 comparisons
| Comparison | What it is | The question it answers |
| ------------------------------ | ------------------------------------------------------------------------------------- | ----------------------------------------------- |
| **LY** — Last Year | Last year's **final** result for the same calendar date | Did we do better than we did? |
| **STLY** — Same Time Last Year | Your position for the date as it stood at the same point in last year's booking curve | Are we selling faster or slower than last year? |
| **Budget** | The target you set yourself for the month | Are we going to keep the promise we made? |
## The difference between LY and STLY
This is the single most common mistake in the course, so it is worth being slow about.
Today is 4 June. The date is 15 August.
* **LY** answers: what did we finally achieve on 15 August last year? Perhaps you sold 46 rooms at €138.
* **STLY** answers: how many rooms did we hold for 15 August on 4 June last year? Perhaps 28.
You hold 23 today. Against STLY you are 5 rooms behind, which is a real signal. Against LY you are 23 rooms behind — but that comparison is meaningless, because last year had another 10 weeks to sell those rooms.
{% hint style="warning" %}
**Never judge a future date against LY.** A forward date compared with a finished result will always look catastrophic, and the panic it causes leads to rate cuts that were never needed. Use STLY for anything that has not happened yet.
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### Which one to use
* **A month that has finished:** use LY. Both numbers are final, so the comparison is fair.
* **A date still selling:** use STLY. It is the only fair way to compare booking pace.
* **A month in progress, against your own plan:** use budget.
## A warning about budget
Your budget is 2 numbers a month: Room Nights and Revenue. Revhero calculates occupancy, ADR and RevPAR from them.
On [Daily Performance](/revhero-docs/your-hotels-performance/daily-performance.md), revhero spreads the monthly target evenly across the days of the month. A 1,200 room-night target in April becomes a benchmark of 40 room nights each day.
That spread is even, and your demand is not. If your business is concentrated at weekends, your Tuesdays will look terrible and your Saturdays wonderful, every single week.
**Read the daily budget variance over a month, not over a day.** The daily figures balance out. Acting on one Tuesday is acting on the shape of the calendar, not on the health of the hotel.
## Worked example
The 50-room hotel, reading August in early June.
| Measure | This year, on the books | STLY | LY final | Budget |
| ----------- | ----------------------- | ------- | -------- | -------- |
| Room nights | 640 | 700 | 1,290 | 1,300 |
| Revenue | €82,000 | €87,500 | €176,000 | €182,000 |
Three readings, 3 different conclusions.
**Against STLY:** 60 room nights behind, about 9%. That is the real signal. August is selling more slowly than last August did at this distance from arrival.
**Against LY:** 650 room nights behind. This tells you nothing at all. You are 8 weeks from the month starting, and last year's figure is the finished total.
**Against budget:** you are at 49% of the room-night target with the month not yet open. On its own that is neither good nor bad. It matters only next to the share you normally hold at this point, which is what STLY is telling you.
The correct conclusion is the first one, and the action is to look at which dates inside August are behind — not to cut the rate across the month.
## Try it on your own hotel
1. Open the [Dashboard](/revhero-docs/your-hotels-performance/dashboard.md).
2. Set the **Period** to a month that has already finished, and the **Comparison Period** to LY. Write down the RevPAR variance.
3. Now set the period to a month 2 or 3 months ahead, still with LY. Write that variance down too, and notice how alarming it looks.
4. Change the comparison to STLY and read it again. That second figure is the true one.
5. Open [Budget & Target](/revhero-docs/your-hotels-performance/budget-target.md) and check the current month has both numbers filled in. If it does not, you have no budget comparison anywhere in the product.
Step 3 is deliberate. Seeing the misleading figure once, and knowing why it is misleading, is worth more than being told.
## Check yourself
**1.** October is 62% behind LY, and you are reading this in July. Should you cut rates?
Answer
No. You are comparing a forward month against a finished result, which is never a fair comparison. Switch to STLY and read it again before making any decision.
**2.** Your hotel opened 5 months ago. Which comparison can you use?
Answer
Budget. STLY and LY both need 12 months of history, so neither is available yet. Use the budget comparison until you have a full year behind you.
**3.** Every Tuesday shows a large red variance against budget, and every Saturday a large green one. Is anything wrong?
Answer
No. The monthly target is spread evenly across the days, and your demand is not even. Read the variance across the whole month, where the daily differences balance out.
## What you learned
* LY is last year's finished result. STLY is last year's position at the same distance from arrival.
* Use LY for finished periods, STLY for anything still selling, budget for your own promise.
* Judging a future date against LY causes rate cuts that were never needed.
* Daily budget variance is distorted by the even spread. Read it monthly.
## Next
* [Lesson 5 · How to read one date](/revhero-docs/learn-revhero/learn/05-reading-one-date.md) — everything so far, applied to a single date.
* [Budget & Target](/revhero-docs/your-hotels-performance/budget-target.md) — where the third comparison comes from.
***
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