Hotel Revenue Glossary · Benchmarking

Competitive Index

A generic term for any metric that compares a hotel's performance to its competitive set, expressed as an index where 100 equals fair share. MPI, ARI, and RGI are all competitive indexes. Values above 100 indicate outperformance; below 100 indicates underperformance.

Why it matters: Competitive indexes add relative context when the set, source, period, room supply, and methodology are valid. ARI 105 means property ADR is 5% above the defined comparison ADR for that period; it does not by itself establish product power, profitability, or cause.

Worked example: Index maths is one line: RGI = MPI x ARI / 100. Say MPI is 112 and ARI is 88 — that gives 112 x 88 / 100 = 98.6. You are filling more than your share of rooms and charging less for them, and the two nearly cancel. Now pick your lever. Lifting ARI from 88 to 94 at a steady MPI takes RGI to 105.3. Matching that on volume means pushing MPI to 120 for an RGI of 105.6 — many more rooms sold for the same outcome.

Common mistake: Setting a target on an index you do not control both sides of. An RGI goal of 105 can be missed because you underperformed or met because a competitor had a bad quarter. Target the underlying number — occupancy, ADR, RevPAR against your own budget — and read the index as diagnosis, not as the objective.

All glossary terms MPI (Market Penetration Index) ARI (Average Rate Index) RGI (Revenue Generation Index)