What the number means.
For every additional ₹1 of room revenue a hotel wins through commissioned channels, last-minute discounting and the cost of servicing the extra night, it can add roughly ₹1.04 in cost. The incremental rupee is bought at a small loss. The hotel did more work, carried more risk, and ended the night marginally poorer than before it chased the booking.
The logic.
Not all revenue is created equal. Top-line growth quietly bundles together four costs that a revenue dashboard never shows side by side: the discount you gave up to win the booking, the commission the channel skims off the top, the marketing spend it took to surface your listing, and the variable cost to clean, power, staff and service the room. Stack them on a single incremental night and the marginal cost of chased revenue can quietly cross ₹1.
This is the trap behind “we grew revenue this quarter.” Revenue grew. Whether profit grew depends entirely on what each new rupee cost to win — and the most expensive rupees are the ones bought through a high-commission channel at a discounted rate.
A worked example.
Take one extra room-night, listed at ₹4,000, sold through an OTA at an 18% commission after a 10% promotional discount. Follow every rupee of cost that rides along with it:
The hotel booked ₹4,000 of headline revenue and spent ₹4,160 to earn it. On the dashboard this is a win — occupancy up, RevPAR up. In the bank account it is a four-rupee hole for every hundred rupees of “growth.”
What ProfitPAR does with it.
RevPAR applauds the ₹4,000 and stops counting. ProfitPAR™ nets the ₹4,160 against it and tells the truth: this particular rupee was a loss. The point is not to stop selling — it is to know which rupees pay and which don't, and to win more revenue through the channels where cost per rupee stays well under ₹1: direct bookings, defended rate, and demand you don't have to discount or rent back from a middleman.
Figures are composite and illustrative, representative of patterns observed across many properties. They do not reflect any single named hotel.