Performance & revenue
RevPAR index
Also written: RGI, revenue generation index
What RevPAR index means
RevPAR Index, or Revenue Generation Index (RGI), measures a hotel's RevPAR performance relative to its defined competitive set. A score of 100 indicates fair market share, while values above 100 represent premium performance and values below 100 signal underperformance against peers.
Formula
RevPAR Index = (Subject Hotel RevPAR / Competitive Set RevPAR) × 100
How it is used
Revenue managers use RGI to evaluate yield performance independent of broader market shifts. An RGI above 100 confirms a property captures more than its fair share of revenue, whereas an RGI below 100 triggers adjustments to pricing strategies, channel distribution, or sales efforts. Owners and asset managers rely on RGI trends to assess general manager performance, justify capital expenditures, and set incentive management fees. Tracking RGI alongside Occupancy Index (MPI) and Average Rate Index (ARI) isolates whether revenue gains stem from volume or pricing power.
Worked example
A hotel achieves a RevPAR of $150 during a quarter, while its competitive set averages a RevPAR of $125 over the same period. The RevPAR Index is ($150 / $125) × 100 = 120. This demonstrates the property generated 20% more revenue per available room than its direct competitors.
Common mistake
Relying on an inaccurately defined competitive set distorts the index, creating a false sense of outperformace or unfairly penalizing hotel staff.
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RevPAR index in our reporting
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