RevPAR Index Calculator — Revenue Generation Index (RGI)

About the RevPAR Index Calculator — Revenue Generation Index (RGI)

The RevPAR Index — officially called Revenue Generation Index (RGI) — is the most comprehensive single metric for measuring hotel competitive performance. It compares your hotel's RevPAR against the competitive set average, revealing whether you're capturing more or less than your fair share of market revenue.

An RGI above 100 means your hotel generates more revenue per available room than the competition. An RGI of 110 means you're outperforming by 10%. Below 100 signals competitive weakness that needs investigation — is it a rate problem (ARI), an occupancy problem (MPI), or both?

RGI is the metric that hotel owners, asset managers, brand companies, and management companies focus on most. It's the key performance indicator in management agreements, and consistent underperformance on RGI can trigger operator termination clauses in some contracts.

When This Page Helps

RevPAR alone can look good in a rising market. RGI tells you whether you're winning or losing relative to direct competitors. A hotel with growing RevPAR but declining RGI is falling behind the market — the tide is lifting all boats, but yours is rising slower.

How to Use the Inputs

1. Enter your hotel's RevPAR for the period.
2. Enter the comp set average RevPAR.
3. Review the RGI score and revenue gap per available room.
4. An RGI above 100 means you're capturing more than fair share.
5. Track RGI monthly and year-over-year for trend analysis.
6. Decompose RGI into ARI and MPI to diagnose rate vs. occupancy drivers.

Example Calculation

Tips & Best Practices

• RGI above 100 is the primary goal — it means you're winning market share.
• Decompose RGI into ARI × MPI ÷ 100 to understand whether rate or occupancy is driving performance.
• A declining RGI even with growing RevPAR signals the market is growing faster than you.
• Compare RGI across different time periods to identify seasonal competitive advantages.
• Use RGI targets in management incentive plans to align operator performance with ownership goals.
• If RGI is below 100, compare ARI and MPI separately to identify the weaker metric.

RGI: The Ultimate Hotel Performance Metric

Hotel investors rely on RGI more than any other metric because it normalizes for market conditions. In a strong market, all hotels see RevPAR growth — RGI distinguishes winners from losers by showing who captured the most market share. In a downturn, RGI shows which hotels held up best relative to competition.

Decomposing RGI for Strategic Insight

Since RGI = ARI × MPI ÷ 100, a low RGI can stem from either weak pricing (low ARI) or weak occupancy (low MPI). A hotel with ARI of 105 (strong rate) but MPI of 85 (weak occupancy) has an RGI of about 89 — the rate strategy is fine but the property isn't filling enough rooms. The strategic response differs based on this diagnosis.

Year-Over-Year RGI Trends

Track RGI year over year to filter out seasonal effects. A hotel might have an RGI of 95 in January (off-season) and 118 in July (peak) — both can be acceptable if they match or exceed prior-year levels. The trend matters more than the absolute number.

Frequently Asked Questions

• What is a good RGI?

  An RGI above 100 means you're outperforming the comp set. Most well-managed hotels target 100-115. Consistently maintaining 120+ may indicate your comp set needs updating — you may be competing above your current set.

• How is RGI different from RevPAR?

  RevPAR measures absolute room revenue efficiency. RGI measures relative performance against competitors. Your RevPAR can grow while your RGI declines if competitors are growing faster.

• Can I calculate RGI from ARI and MPI?

  Yes. RGI = ARI × MPI ÷ 100. This decomposition is valuable because it reveals whether competitive performance is driven by rate (ARI) or occupancy (MPI), guiding the appropriate strategic response.

• How often is RGI reported?

  STR provides weekly and monthly competitive reports that include RGI. Most revenue managers review RGI monthly with deeper quarterly and annual analyses.

• What causes RGI to decline?

  Common causes include competitor renovations, new hotel openings in the market, ineffective pricing strategy, poor channel management, deteriorating online reputation, or brand changes at competing properties. Review your results periodically to ensure they still reflect current conditions.

• Is RGI used in management agreements?

  Yes. Many hotel management agreements include RGI performance thresholds. Consistent underperformance (typically RGI below 95-100 for extended periods) can trigger termination clauses or performance improvement plans.