MPI, ARI, RGI: the three fair-share indices
MPI (Market Penetration Index) = hotel occupancy / compset occupancy × 100. Measures your volume performance. ARI (Average Rate Index) = hotel ADR / compset ADR × 100. Measures your pricing. RGI (Revenue Generation Index) = MPI × ARI / 100 ≈ hotel RevPAR / compset RevPAR × 100. The reference index for overall positioning.
Building a relevant compset
A compset (competitive set) typically groups 4-7 hotels of the same geographic segment and category. Criteria: same area (city, tourist district), same star category, same positioning (business vs leisure), comparable size. Data come from STR subscriptions or direct exchange between hoteliers (common in Luxembourg via Hotrec LU).
Interpretation: fair share, price problem, commercial problem
RGI ≈ 100: fair share reached, market-level performance. RGI < 95 with low MPI and good ARI: distribution/commercial problem (visibility, channels, reputation). RGI < 95 with good MPI and low ARI: pricing problem (under-pricing to fill). RGI > 105: over-performance — watch the market ceiling, lever for rate increase.
Frequently asked questions
Where to find compset data without STR subscription?
STR Global costs €5-20k/year depending on market. Free alternatives: Hotrec LU quarterly sharing, OTA dashboards (Booking, Expedia), bilateral agreements between local hoteliers. Chambers of commerce sometimes provide aggregated data by canton.
Recommended analysis frequency?
Monthly for a cruising hotel. Weekly in high season or during repositioning phase. Revenue managers also use daily tracking on 14-day rolling windows during critical periods (trade shows, event weekends).
My RGI is good but GOP is bad — why?
RGI measures top-line performance (revenue vs market). GOP measures operational profitability. A hotel can have excellent RGI and weak GOP if it over-staffs, overpays for energy or keeps disproportionate fixed charges. Use the Operation USALI tool to identify the problem item.