What is the RevPAR Index? An index is a measure that represents your market of interest. It tells you how good you are doing relative to that competition expressed in a percentage that should strive to be as close to 100% (or higher) as possible.
The RevPar index or Revenue Generating Index (RGI) measures a hotel’s RevPAR performance relative to an aggregated grouping of hotels similar to the property you’re analyzing. If all things are equal, a property’s RevPAR Index, or RGI, should be 100.
This comparison should always be made against properties in the same category. Whatever the rental property you manage, no matter how hard you work to please your guests, if your business is mid-level you should compare it with other mid-level lodging properties, not 5-star hotels, or 1-star motels.
After establishing both your RevPAR and your direct competitor’s RevPAR, you can calculate the RevPAR Index.
RevPAR Index = (RevPAR / Competition’s RevPAR) × 100
Is your RevPAR index more than 100? You’re beating out your competitors. Less than 100? Time for some strategic improvements.