Revenue blog · Benchmarking
RGI vs MPI vs ARI: how to read the three competitive indices properly
The first time I saw a hotel team misread the three competitive indices, the property had RGI of 102, smiled at the slide, and moved on. The MPI was 116 and the ARI was 88. Same hotel, same month. The team had spent a quarter buying occupancy with rate cuts and reported the result as a win because the headline index sat above 100. The owner read the RGI line. The owner did not read MPI or ARI. That meeting cost the property about A$140,000 of forgone ADR before anyone went back and read the indices in the right order. RGI vs MPI vs ARI is not three numbers. It is one diagnostic in three layers — and the layer order matters.
What RGI, MPI and ARI actually mean in 2026
MPI — Market Penetration Index. Your occupancy divided by the comp-set's occupancy, times 100. It is the demand-share story — given how full the market is, how full are you?
ARI — Average Rate Index. Your ADR divided by the comp-set's ADR, times 100. It is the rate-share story — given what the market is charging, what are you charging?
RGI — Revenue Generation Index. Your RevPAR divided by the comp-set's RevPAR, times 100. It is the revenue-share story — given how much the market is earning per available room, how much are you earning?
The math: how the three indices fit together
| Index | Formula | What it measures |
|---|---|---|
| MPI | (Your occupancy ÷ comp-set occupancy) × 100 | Share of demand |
| ARI | (Your ADR ÷ comp-set ADR) × 100 | Share of rate |
| RGI | (Your RevPAR ÷ comp-set RevPAR) × 100 = (MPI × ARI) ÷ 100 | Share of room revenue |
Worked example. Your hotel runs 78% occupancy this month at an ADR of A$210. The comp set runs 75% occupancy at an ADR of A$220. Your RevPAR is A$163.80. The comp-set RevPAR is A$165.00. MPI = (78 ÷ 75) × 100 = 104. ARI = (210 ÷ 220) × 100 = 95.5. RGI = (163.80 ÷ 165.00) × 100 = 99.3. Check: (104 × 95.5) ÷ 100 = 99.3. The two paths to RGI return the same answer because they are the same answer.
The number that matters is not 99.3. The number that matters is the gap of 8.5 points between MPI and ARI. The hotel is winning the occupancy race and losing the rate race. RGI looks like parity. The strategy is anything but.
Where each index breaks down
Each of the three indices lies in a specific way. The job is knowing the lie.
Where MPI breaks down
MPI counts heads. It does not care how much you charged to get them. A property running 12 points above the comp set on occupancy can be discounting hard, paying for room-nights with cash. MPI will reward the behaviour by climbing toward 110, 115, 120. The owner will read the index and conclude the hotel is winning. The hotel may be winning the occupancy column and losing the contribution column at the same time. MPI also moves with channel-mix decisions — a property that opens its inventory wider to OTAs will see MPI rise in lockstep with commission cost, and the commission cost never shows up in the index.
Where ARI breaks down
ARI is rate, and rate is the easiest of the three to mislead with. ARI compares your ADR to the comp-set ADR, but it has no idea what is inside each rate. Breakfast-included rates inflate ARI on the way in and deflate the F&B margin on the way out. Package allocations move rate revenue into other revenue lines and tug ARI around like a kite string. Resort fees and destination fees, where they are present, are treated differently by different reporting standards — one hotel's ARI can be 6-8 points off another's purely because of how the property treats its fees. ARI is a rate-positioning signal. It is not a rate-quality signal.
Where RGI breaks down
RGI is the headline number, which is why it is the most over-read. RGI compresses the rate story and the occupancy story into a single index and then politely refuses to tell you which of the two stories did the work. An RGI of 100 can be MPI 100 / ARI 100 (genuine parity), MPI 115 / ARI 87 (occupancy bought with discount), or MPI 87 / ARI 115 (rate held through a soft month). Three different hotels. Three different strategies. One RGI. If the only number on the slide is RGI, the slide is not telling you what the hotel is doing — it is telling you the maths of the comp set. There is a separate piece I wrote on ADR vs RevPAR vs GOPPAR that walks through how the same shape of trap shows up when revenue indices are stripped of their cost layer. The same logic applies here: any single index, on its own, is a story with the middle pages missing.
RGI is the answer to a question MPI and ARI have already asked. Read in that order. Read in any other order, and the conversation goes sideways.
The right reading order: MPI, then ARI, then RGI
I read the three indices in the order they should be read, which is the opposite of the order most decks present them in. Most owner slides put RGI at the top because RGI is the summary. I open the conversation at MPI for one reason: MPI is the only index of the three that is harder to game with internal policy. Occupancy is occupancy. Once you have read MPI, ARI tells you the rate posture you ran while you were filling those rooms. RGI then becomes a check on whether the two stories added up to fair share. RGI never opens the conversation. RGI closes it.
The reading order in practice:
- MPI first. Did we get our share of demand? If MPI is materially above 100, we filled more than fair share. If materially below, we did not.
- ARI second. What did we charge while we were filling? An MPI of 110 paired with an ARI of 86 is a different hotel than an MPI of 110 paired with an ARI of 102.
- RGI third. Does the combined story produce fair share of revenue? If RGI is sitting near 100 with MPI and ARI moving in opposite directions, the strategy is doing one job at the expense of the other. That is not failure; it is a deliberate posture or an accidental one, and you need to know which.
Reading the indices in the wrong order — RGI, then MPI, then ARI — is how a hotel team ends up arguing about a number that was never the question. RGI is the consequence. MPI and ARI are the cause.
What to do about the gap — an operator playbook
The fix for misread indices is procedural, not analytical. Five steps close the gap permanently.
- Always report the three indices on one row. One row, three columns: MPI, ARI, RGI. Same period. Same comp set. Same denominator. Reading any of the three alone is reading the report wrong. The dashboard I run for our customers shows the three indices next to each other on the snapshot line, with a one-line caption that names the posture (occupancy-led, rate-led, balanced, ramp).
- Add a 12-month trend line. A single month of indices is noise. The decision-grade signal is the rolling 12-month trend in each of the three. If MPI is drifting up over six months while ARI is drifting down, you have a discount habit forming. If the reverse, you have a rate-hold posture maturing. Neither is visible in a single snapshot.
- Audit the comp set annually. The comp set is the denominator of all three indices, and a stale denominator quietly distorts every reading. New supply opens, a competitor repositions, a property changes brand — all of these alter what your hotel is being measured against. Without a comp-set audit, the indices keep moving while the reasons go un-named. We wrote this up at length in the piece on hotel revenue management strategies for 2026; the comp-set audit sits at the top of the annual list.
- Name the posture every month. When you publish the indices, write a one-line caption that says what they describe — "occupancy-led, rate cost 4.2 ARI points" or "rate-held, occupancy traded 6 MPI points". That sentence makes the indices legible to a non-RM reader. Owners do not need to learn what MPI is; they need to know what the three numbers, together, mean for the hotel. The caption is the bridge.
- Tie the indices to forecast. A standalone index is a rear-view. An index laid over the demand forecast is a steering signal. If the next 14 days look like a high-occupancy period in your demand calendar, the comp set will likely lift on occupancy too, and your MPI will only move materially if you out-fill them. Reading indices against expected market shape is the difference between a benchmark and a decision.
A real scenario: a 120-room CBD hotel with the wrong winning slide
MPI was 117. ARI was 88. The team had outpaced the comp set on occupancy by 17 points and lagged on rate by 12. The combined fair-share story was just above parity. The strategic story was a hotel quietly migrating into a discount posture during the strongest quarter of its corporate season. Annualised, the ARI lag was costing roughly A$22 per available room per night — about A$960,000 across the year on 120 rooms at typical occupancy. The RGI of 103 had been bought with a rate concession the deck did not name.
The fix took two months. We added the MPI / ARI / RGI row to the daily snapshot, ran a comp-set refresh that removed two properties no longer substitutable for the hotel's corporate guest, and rebuilt the rate ladder so the floor on the corporate negotiated tier sat 6% higher than the previous quarter. By month three, ARI was at 96 and MPI had eased to 108. RGI moved from 103 to 104.8 — barely visible in the headline — while the underlying contribution improved by a multiple of that change.
How the three indices read across different postures
Five common postures, the indices each one tends to produce, and what the reading order tells you. None of these are good or bad in isolation — each one is the right or wrong answer depending on the hotel's stated strategy.
| Posture | MPI | ARI | RGI | What the indices are saying |
|---|---|---|---|---|
| Balanced parity | 100 | 100 | 100 | Hotel is tracking the comp set on both dimensions. |
| Occupancy-led | 113 | 92 | 104 | Filling above fair share, rate has paid for it. |
| Rate-led | 91 | 112 | 102 | Rate held; occupancy has paid for it. |
| Ramp | 85 | 96 | 82 | New build or reposition; both indices trail by design. |
| Compression win | 106 | 108 | 114 | Genuine outperformance; demand and rate both above set. |
FAQ
What do RGI, MPI and ARI stand for?
MPI is the Market Penetration Index — your occupancy ÷ comp-set occupancy × 100. ARI is the Average Rate Index — your ADR ÷ comp-set ADR × 100. RGI is the Revenue Generation Index — your RevPAR ÷ comp-set RevPAR × 100. All three are fair-share indices, normalised so that 100 is parity with the set.
How is RGI calculated?
RGI = (your RevPAR ÷ comp-set RevPAR) × 100. Mathematically equivalent to (MPI × ARI) ÷ 100, because RevPAR is itself ADR × occupancy. Most operator decks show the RevPAR-ratio version; the decomposition is what makes the index diagnostic rather than ornamental.
What is a good RGI for a hotel?
There is no universal target. RGI sitting near 100 is parity with the set, which is the right outcome for a balanced posture and the wrong outcome for a property positioned above set. The honest benchmark is direction of travel against the same comp set over a rolling 12 months.
Can MPI and ARI move in opposite directions?
Yes, and the divergence is usually the most useful signal in the report. An occupancy-led posture pulls MPI up and ARI down; a rate-led posture does the opposite. Both can sit on top of an RGI near 100 — same headline, different hotels.
How big should a hotel comp set be?
Four to eight properties is the workable range. Fewer and a single outlier dominates; more and the average smooths out the signal. The members should be genuinely substitutable — guests choosing between them on the same booking — not picked for flattery.
How often should I review the three indices?
Monthly, with a rolling 12-month trend behind each one. Weekly is too noisy for a multi-property benchmark; quarterly is too slow to catch comp-set drift. The monthly cadence sits where the signal-to-noise ratio is best.
What is the difference between RGI and fair-share index?
RGI is the revenue-fair-share index. MPI and ARI are the occupancy- and rate-fair-share indices respectively. All three are the same idea — your slice of the comp set's per-room performance, normalised to 100 — applied to three different layers.
The honest summary
MPI is the room-share story. ARI is the rate-share story. RGI is the revenue-share story. Read in that order, the three indices are the cleanest competitive diagnostic a hotel has. Read out of order, or read in isolation, RGI is just a number that flatters or punishes the property for reasons the slide does not explain. The hotels that use the indices well are not the hotels with the highest RGI — they are the hotels whose MPI and ARI are pointing where the strategy said they would.
At RevPerfect we built the snapshot around the three indices on one line, with the 12-month trend underneath and the posture caption written in plain language above it. Not because the indices are hard to compute — they aren't — but because keeping them together is the difference between a meeting that lands and a meeting that wobbles. If you want to see how the three indices read on your hotel's own snapshot, book a 20-minute walkthrough.