What Is RGI? The One Hotel Metric That Catches What RevPAR Hides
Revenue Generation Index (RGI), also called RevPAR Index, measures how much revenue your hotel earns compared with your direct competitors. You calculate it by dividing your RevPAR by your competitive set's average RevPAR, then multiplying by 100. A score of 100 means you earn your fair share of the market. Above 100 means you outperform your compset. Below 100 means competitors are taking revenue that could be yours.
Here is why this one number matters so much. In 2025, CoStar's full-year data shows US hotel RevPAR barely moved on average — yet New York grew 4.5% while Las Vegas fell 10.9%. A hotel that grew RevPAR 2% in a booming city still lost ground. One that fell 3% in a crashing market actually won. Your own dashboard cannot tell you which story is yours. RGI can. This guide shows you how to calculate it, read it honestly, and move it up.
How to Calculate RGI: The Formula With a Worked Example
The formula comes straight from the industry-standard definition from STR, the benchmarking arm of CoStar:
RGI = (Your hotel's RevPAR ÷ Your compset's average RevPAR) × 100
Here is the manual process, step by step:
- Pick your competitive set. Choose 5–10 hotels your guests genuinely compare with yours. Match on location, size, star rating, and price range.
- Calculate your own RevPAR. Multiply your occupancy rate by your ADR. Or divide total room revenue by total available rooms.
- Find your compset's average RevPAR. This comes from a shared benchmarking report, such as an STR (STAR) report.
- Divide, then multiply by 100. That number is your RGI.
A worked example we will follow through this article: Imagine a 30-room boutique hotel. It runs 75% occupancy at a £120 ADR, so its RevPAR is £90. Its compset averages £100. Its RGI is (90 ÷ 100) × 100 = 90. The hotel is capturing 10% less revenue than its fair share. Every night, guests it should win are sleeping somewhere else.
Some tools show RGI as a decimal, where 1.0 equals fair share. The math is identical. STAR reports use the 100 scale, so this guide does too.
Why RGI Matters More Than Your Own RevPAR
Owners and lenders already treat RGI as the headline number. Real US hotel management agreements show how seriously. Some contracts give owners the right to terminate the operator if profit misses target and the RevPAR Index sits below 100. Others tie part of executive bonuses directly to the RevPAR Index. In plain words: careers and contracts ride on this score.
The reason is simple. RevPAR alone flatters you in a rising market and punishes you in a falling one. RGI strips the market out. It isolates the part you actually control: your pricing, your distribution, and your marketing against the exact hotels your guests compare you with.
Key takeaway: RevPAR tells you how much you earned. RGI tells you whether you earned it because of your strategy — or despite it.
What Is a Good RGI Score?
There is no single "good" number for every property. A 105 is strong for a city boutique hotel in a dense market. The same score in a seasonal resort may hide weak peak weeks. Use these bands as a starting point, then judge your own trend.
Our example hotel sits at 90 — right at the edge of the danger zone. But the band alone does not say why. For that, you need the matrix below.
The RGI Truth Matrix: Read Your Score and Your RevPAR Together
Your RevPAR trend and your RGI trend can move in opposite directions. That combination is where the truth lives. Place your hotel in one of these four boxes each month.
The 2025 US data shows why this matrix matters. A San Francisco hotel that grew RevPAR 5% sounds healthy — until you learn the market grew 11.8%. That hotel lived in False Comfort all year. Meanwhile, a Las Vegas hotel that fell 4% outperformed a market that fell 10.9%. That is a Hidden Win, and it deserves a bonus, not a budget cut.
Key takeaway: Never judge a RevPAR number without its RGI. The matrix turns two trends into one honest verdict.
RGI vs MPI vs ARI: Finding Out Why You Win or Lose
RGI tells you the verdict. Its two sister indexes from STAR reports tell you the cause.
Back to our boutique hotel at RGI 90. Suppose its MPI is 104 and its ARI is 87. Now the problem has a name. The hotel fills more rooms than the market — but at rates 13% below its peers. It is buying occupancy with cheap prices. The opposite pattern, high ARI with low MPI, means your rates push guests toward competitors. Either way, the diagnosis decides the fix.
Where to Get the Data for Your RGI
Your side of the equation is easy. Your PMS holds your occupancy, ADR, and RevPAR. The compset side is harder, because competitor revenue is private.
STAR reports from STR
The standard source is a STAR report from STR (CoStar). Participating hotels submit real performance data. In return, they receive anonymized compset averages plus the three indexes. This is the only way to get true compset RevPAR.
Your own estimate
Smaller properties without a subscription can build a rough proxy. Track competitors' published rates over time and pair them with visible signals, like sold-out dates. It will never be exact. But a consistent method still shows direction.
Rate intelligence tools
You cannot see a competitor's RevPAR without shared data. You can see their rates every day. Tools like PriceLabs track publicly available rates from Booking.com for up to 350 nearby hotel-like properties, and let you build custom comp sets of the rivals you choose. On your side of the ratio, its Portfolio Analytics and Report Builder track your RevPAR, ADR, occupancy, and pacing down to room-type level. Together, that covers the daily inputs behind your RGI, while the STAR report confirms the official score each month. It is one of the pricing strategies that turns benchmarking from a monthly report into a daily habit.
Common Mistakes When Reading RGI
Building the wrong compset
Compare a 20-room B&B with a 200-room chain hotel and your RGI is meaningless. Your compset should be the shortlist your guests actually scroll through. Review it every six months, because new openings and renovations shift the field.
Using RGI alone
RGI is relative. A hotel can hold an RGI of 100 in a shrinking market and still earn less money each year. Track absolute RevPAR and total revenue alongside the index — the Truth Matrix exists for exactly this reason.
Treating one snapshot as the story
Markets move weekly. Event announcements, competitor promotions, and seasonal shifts all change your position. Watch the trend over months, and review your inputs at least weekly during peak booking windows.
How to Improve Your RGI: Four Practical Levers
Fix your weakest dates first
Pull your calendar and find the dates where you trail the market. Usually that means midweek, shoulder season, or the nights around local events. Small corrections on weak dates lift RGI faster than broad changes.
Price each room type on its own demand
Our example hotel's diagnosis was low ARI: rates 13% under its peers. The fix is not one big price rise. Standard doubles and suites do not sell the same way, so adjust each room type as it fills. Tools like PriceLabs automate this loop with Occupancy-Based Adjustments, moving a room type's rate as its own occupancy shifts against the market.
Set seasonal rules once, apply them all year
Define your peak, shoulder, and low seasons with their own base prices and minimum stays. In PriceLabs, Seasonal Profiles and minimum stay rules apply these strategies automatically. Event weekends stay protected by longer stays and higher floors, without daily manual edits.
Automate the daily reprice
Manual weekly repricing means you react days after competitors move. A dynamic pricing system runs the same loop you would run by hand — check demand, check competitor rates, adjust — every single day. PriceLabs' Hyper Local Pulse algorithm does this using publicly available market data, your internal occupancy, seasonality, lead time, and local demand signals. It then syncs updated rates to your PMS once a day by default.
What This Means for Your Hotel
Follow the arc of our 30-room boutique. It started at RGI 90 with a flattering MPI and a weak ARI. It raised rates on room types that filled fast, protected event dates with stay rules, and stopped discounting its strongest weekends. Six months of steady corrections later, an RGI of 101 is a realistic outcome — not from working harder, but from pricing honestly against its real market.
The timing rewards this discipline. STR and Tourism Economics project US RevPAR growth of just 0.6% for 2026, with the FIFA World Cup adding a lift concentrated in June and July host markets. When an event inflates everyone's RevPAR, only RGI shows whether you captured more than your share of the spike or simply rode it. Build your compset, run the formula monthly, place yourself in the Truth Matrix, and work the levers. For the wider framework around forecasting and distribution, the revenue basics guide is the natural next read.
Frequently Asked Questions
What is RGI in hotel revenue management?
RGI (Revenue Generation Index) measures your hotel's RevPAR against the average RevPAR of your competitive set, indexed to 100. A score of 100 means you capture your fair share of market revenue. It is the headline benchmarking metric on STAR reports and often appears in management contracts and bonus plans.
What is a good RGI score for an independent hotel?
Anything above 100 means you outperform your compset. Scores of 100–110 are healthy, and sustained scores above 110 signal market leadership. Judge the trend over months, not one number, and read it alongside your revenue management fundamentals like ADR and occupancy balance.
Can my RevPAR grow while my RGI falls?
Yes, and it is the most dangerous pattern to miss. It means the market is growing faster than you, so you are losing share while your own numbers look good. This "False Comfort" quadrant is exactly why owners track RGI, not just RevPAR.
How often should a hotel calculate RGI?
Review your official RGI monthly if you receive STAR reports, and watch the daily inputs — your pacing and competitor rates — at least weekly. Fast-moving markets reward hotels that respond daily, which is where predictive analytics and automated pricing earn their keep.
Where does compset RevPAR data come from?
True compset RevPAR comes from shared benchmarking programs like STR's STAR reports, where competitors submit real performance data anonymously. Rate shopping tools show competitor prices, not their revenue, so use both sources together for the full picture.
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