How you perform vs your comp set

What RGI, MPI and ARI actually measure

RGI, MPI and ARI are the three penetration indices that hotel revenue managers use to express their property's performance relative to a competitive set. The formulas are unchanged since STR (now part of CoStar) standardized them in the 1980s: your number divided by the comp set's number, multiplied by 100. An index of 100 means you exactly match the comp set; above 100 is outperformance; below 100 is underperformance.

RGI (Revenue Generation Index) is the headline metric because it captures both occupancy and rate in a single number. MPI (Market Penetration Index) is the occupancy sub-index, isolating volume performance. ARI (Average Rate Index) is the rate sub-index, isolating pricing performance. The three together decompose your competitive position into its two underlying drivers, which is what allows operators to act on the indexes rather than just track them.

The three index formulas

How to read the three indices together

The diagnostic value of these indices comes from reading MPI and ARI as a pair, with RGI as the verdict. A property running MPI 108 and ARI 92 has an RGI of roughly 99: occupancy is six points stronger than the market but at an eight-point rate discount, and the net effect is one point below market. The hotel is winning the volume game and losing the rate game, and the fix is to test rate increases on the highest-demand dates rather than to chase even more occupancy.

Conversely, MPI 92 and ARI 108 produces an RGI of roughly 99 as well, but the hotel needs the opposite intervention: it is priced for a stronger market than it can fill, and the fix is either demand generation (a tighter direct booking program, more metasearch presence) or surgical rate discipline on shoulder dates that price the hotel out of consideration.

What MPI tells you that ADR alone cannot

• MPI above 100 with stable ARI: the hotel is outselling the market without sacrificing rate, which is the textbook signal of healthy demand. Keep doing what is working.
• MPI above 100 with ARI falling: occupancy is being bought through rate cuts. Look for parity leaks, low-yield OTA promotions, or wholesalers that have been turned back on.
• MPI below 100 with ARI rising: the hotel is yielding above market but losing volume. Test rate restrictions on soft dates, or restore a discounted rate plan that has been removed.
• MPI and ARI both below 100: the hotel is losing on both axes, which is usually a positioning or product problem rather than a revenue management problem. The calculator surfaces the issue; the fix is operational.

How to act on RGI changes month over month

An RGI that has dropped 3 to 5 points month over month is the standard internal trigger for a revenue strategy review at most independent hotels. Pull the same window from last year, decompose into MPI and ARI changes, then identify whether the gap is structural (a new opening in the comp set, a competitor refresh) or tactical (a pricing test that failed, a soft group base). The calculator only produces the number; the value is in the conversation that the number forces.

• Compare RGI year-over-year, not month-over-month: most properties have stable seasonality patterns that mask the trend in a single month.
• Always pull MPI and ARI alongside RGI; an RGI report without the sub-indices is impossible to act on.
• Audit the comp set at least annually; a stale comp set produces stale indices. STR comp sets need formal change requests on a defined cadence.
• Cross-check against the STR STAR Report rather than calculator-only numbers when a strategic decision is on the line; the calculator is for speed, not for board reporting.