Revenue Management

RGI — Revenue Generation Index

Your RevPAR share against the competitive set — 100 means fair share, above means you are winning revenue.

Academic definition

The Revenue Generation Index (RGI) measures a hotel's RevPAR relative to that of its competitive set, expressed as an index where 100 represents fair share. It is calculated by dividing the subject hotel's RevPAR by the competitive set's RevPAR and multiplying by one hundred. An RGI above 100 indicates the hotel is capturing more than its proportional share of market revenue; below 100 indicates underperformance. Because RevPAR combines rate and occupancy, RGI reflects overall revenue competitiveness rather than either dimension alone, and is commonly reported in third-party benchmarking studies alongside the Market Penetration Index and Average Rate Index. RGI is a relative measure: it shows position against peers but not absolute profitability. A hotel can lead its competitive set on RGI while both it and its peers operate at rates that fail to cover the full cost of the business they book.

Worked example

Your RevPAR of ₹3,000 against a compset RevPAR of ₹2,800 gives RGI = 3,000 ÷ 2,800 × 100 ≈ 107 — winning revenue share, profit unknown.

The ProfitPAR^™ lens

RGI tells you that you are beating the hotel across the road. It does not tell you that the whole street is losing money. As a relative measure it inherits every blind spot of the RevPAR it is built on — channel-blind and cost-blind — and adds a new risk: a comfortable index can lull an owner while the entire competitive set discounts itself toward the floor together. Winning fair-share of revenue is not the same as winning fair-share of profit. ProfitPAR™ would rather you index against retained profit than gross revenue, because a market can post healthy RGI numbers and still hand most of its rate to OTAs in unison. Beating your compset is only worth it if the prize is profit.

Beating the compset on revenue means nothing if the whole street is bleeding profit.

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Worked examples use illustrative figures in Indian Rupee (₹) with lakh/crore conventions. They are composite and representative, not drawn from any single property. ProfitPAR™ is a trademark of Sibasish Misra.