RGI (RGI)
In hotel revenue management, RGI (Revenue Generation Index) is your property's RevPAR divided by the RevPAR of your competitive set, showing whether you are capturing more or less than your fair share of the market's room revenue.
It is the number that turns "we had a good month" into a claim you can actually defend.
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What is RGI in hotels?
RGI compares your RevPAR to the RevPAR of the properties you compete with. Above 1.0 means you are taking more than your share. Below means less.
Some reports express it as an index out of 100 rather than 1.0, so 112 rather than 1.12. Same figure, different convention. Others call it RPI, for Revenue Penetration Index, and the industry also writes it as Revenue Generated Index. All four names describe the same calculation, which is worth knowing because a market report and a consultant may hand you different labels for one number.
Fair share is the idea underneath it. If your comp set including you has 300 rooms and you have 46, your fair share of the market's revenue is about 15 percent. RGI asks whether you got that, more, or less.
The index is the hotel industry's answer to a real problem: absolute performance figures are almost meaningless without market context. A RevPAR fall of 8 percent in a market that fell 15 is a strong year. The same fall in a market that grew 5 is a serious problem. RevPAR cannot tell those apart. RGI can.
It sits alongside two siblings that decompose it: MPI for occupancy share and ARI for rate share.
Resources: RevPAR · Comp set · Market intelligence
How RGI works in practice
Divide your RevPAR by the comp set's RevPAR for the same period.
Worked example. A 46-room inn posts $127 RevPAR in October. Its five-property comp set averages $109. RGI is 1.17, so the property captured 17 percent more revenue per available room than its market. If the comp set had averaged $140, RGI would be 0.91 and the same $127 would represent a share loss.
The number is most useful as a trend rather than a snapshot. An RGI of 1.05 tells you little. An RGI that has moved from 1.18 to 1.05 over four months tells you something is going wrong while your own RevPAR may still look fine in isolation.
Decomposing it is where the decisions come from. If RGI is falling, check MPI and ARI separately. Falling MPI with steady ARI means you are holding rate and losing volume, which usually means you are priced above what the market will bear or losing visibility on a channel. Falling ARI with steady MPI means the opposite: you are buying occupancy the market was going to give you anyway.
The awkward case is an RGI that rises while your own RevPAR falls. That happens when the whole market declines and you decline less. It is genuinely good news and it feels like nothing of the kind.
Why RGI matters for independent hotels
An independent has no portfolio to compare against and no brand benchmark. Your only external reference point is the handful of properties competing for the same guest, which makes the index unusually valuable and unusually easy to get wrong.
It is also the number that protects you from drawing the wrong conclusion in a bad year. Every operator who lived through a demand shock has had the experience of assuming their own decisions caused a collapse that was happening to everybody. RGI separates what you did from what the market did, and that distinction is worth a lot when you are deciding whether to change strategy or hold your nerve.
The honest caveat for a small property is that RGI is only as good as the comp set behind it, and independents pick comp sets badly more often than chains do. Five hotels chosen because they are nearby, rather than because a guest would genuinely choose between them and you, produce an index that measures the wrong contest.
Resources: Revenue management for independent hotels
How to use RGI at your property
- Fix your comp set first, and justify it. Write down why each property is on the list. Proximity alone is not a reason.
- Keep it stable. Changing the comp set changes the index, so a "improvement" that followed a comp set edit is not an improvement.
- Read the trend, not the snapshot. Four to six months of direction beats any single month's value.
- Always decompose into MPI and ARI. The headline index tells you there is a question. The two components tell you which one.
- Check it against your own RevPAR direction. The four combinations of RGI up or down and RevPAR up or down each mean something different.
- Do not target 1.0. Depending on your product and position, the right number might be 1.3 or 0.85. A budget motel in a comp set with two boutiques should expect to sit below.
What RGI will not tell you
It cannot validate your comp set. The index will calculate happily against five badly chosen hotels and give you a confident number about a contest you are not in.
It says nothing about profit. Winning share by buying occupancy through high-commission channels raises RGI and can lower what you keep. The index counts revenue, not what the revenue cost.
And it is blind to the market shrinking. Every property in a declining market can hold RGI at 1.0 while all of them lose money. The index measures relative position, which means it is silent on whether the position is worth holding.
How ampliphi approaches competitive position
Competitive insight in ampliphi is a separate view from the everyday rate suggestion, and that separation is deliberate. You choose up to five competitors to watch, and what they are charging does not feed the demand-based suggestion, which is built on your own booking pace and occupancy.
The reason is the trap described above. A comp set tells you what the market is charging. It does not tell you what your demand will bear, and a system that fuses the two will quietly anchor your rate to whoever nearby is discounting hardest.
So the two views answer different questions and stay apart. You approve every rate before it publishes, and ampliphi runs on top of the PMS you already use.
Key takeaways: RGI
- RGI is your RevPAR divided by your comp set's. Above 1.0 means more than fair share.
- Also written RPI, Revenue Penetration Index, or Revenue Generated Index. Same calculation.
- It separates your performance from the market's, which RevPAR alone cannot do.
- Always decompose into MPI (occupancy share) and ARI (rate share).
- It is only as good as the comp set. A badly chosen list gives a confident answer to the wrong question.
- Do not assume 1.0 is the target. The right number depends on your position in the set.
Frequently asked questions about RGI
How do I get comp set RevPAR data as an independent hotel?
Three routes, with different costs. A market benchmarking subscription such as an STR report gives aggregated, anonymised comp set data, which is the most reliable option and the one chains use. Some destination marketing organisations and hotel associations run local benchmarking schemes that small properties can join at far lower cost.
The third route is estimation from rate shopping. You can see published rates for your comp set, and if you can estimate their occupancy you can approximate their RevPAR. This is rough, but a rough RGI trend is considerably more useful than none.
What you should not do is guess once and treat the number as fixed. If the comp set data is estimated, say so on the report, and read the direction rather than the decimal places.
What is a good RGI?
Above 1.0 means you are capturing more than your fair share, but the right target depends entirely on where you sit in your own comp set.
If your property is the best-located and best-appointed of the five, an RGI of 1.0 is underperformance. If you are the budget option among four boutiques, 0.85 might be a strong result. The index does not adjust for product quality, so you have to.
The more useful framing is your own trend. An RGI moving from 0.92 to 1.04 over six months is unambiguously good news regardless of where it started, and it is a claim you can make to a lender or a partner with evidence behind it.
Why is my RGI rising while my revenue falls?
Because the market is falling faster than you are. RGI is a relative measure, so you can lose revenue in absolute terms and gain share at the same time.
This is genuinely good news and it is the situation RGI exists to reveal. In a downturn, the operator without market data concludes their pricing failed and starts discounting, which turns a share gain into a share loss. The operator with RGI can see they are outperforming and hold.
The reverse case is worth watching for too. Rising revenue with falling RGI means the market gave you a good year and your competitors captured more of it than you did.
How is RGI different from MPI and ARI?
They are the same idea applied to different metrics, and they decompose each other. RGI indexes RevPAR, MPI indexes occupancy, and ARI indexes ADR.
Because RevPAR is ADR multiplied by occupancy, RGI is approximately MPI multiplied by ARI. That relationship is the diagnostic. An RGI of 1.10 built from MPI 1.30 and ARI 0.85 is a property winning volume by underpricing. The same 1.10 built from MPI 0.90 and ARI 1.22 is a property holding rate and conceding volume. Those are opposite businesses with an identical headline index.
Never read RGI without looking at both components.
How often should I look at RGI?
Monthly is the usual cadence, because most benchmarking data arrives monthly and because shorter periods are too noisy at small room counts to mean much.
At 25 or 46 rooms, a single group booking or one competitor's refurbishment can swing a weekly index enough to look like a trend. A month smooths that, and a rolling three-month view smooths it further.
What deserves more frequent attention is the input rather than the index: competitor rates for future dates, which move daily and which you can act on while the dates are still sellable. RGI is a scorecard for a period that has closed.
Related terms
Comp set
The small group of properties you genuinely compete with for the same guest. Every index on this page is calculated against it, which makes its composition the single most consequential decision in competitive benchmarking.
RevPAR
Room revenue divided by rooms available. The metric RGI indexes. Reading RevPAR alone tells you how you did. Indexing it against the comp set tells you whether that was good.
MPI
Market Penetration Index: your occupancy divided by the comp set's. One of the two components of RGI, and the one that reveals whether a share gain came from winning volume.
ARI
Average Rate Index: your ADR divided by the comp set's. The other component, and the one that reveals whether you are priced above or below the market you actually compete in.
STR report
A benchmarking report comparing your occupancy, ADR and RevPAR against an anonymised competitive set. The most common source of the comp set data that makes RGI calculable in the first place.