RevPAR Index (RGI)

How It Is Calculated

RevPAR Index = (the hotel's RevPAR ÷ the competitive set's RevPAR) × 100. It has two siblings: the occupancy index (MPI), which compares occupancy, and the ADR index (ARI), which compares average daily rate. RGI is roughly MPI × ARI ÷ 100, so it shows whether a hotel wins on volume, on price, or both. The figures usually come from monthly STR benchmarking reports, and the competitive set is typically four or more hotels chosen by the owner or operator.

How Buyers and Lenders Use It

An index well below 100 with a strong location points to a management, brand or condition problem that a new owner might fix, which is the classic value-add hotel story. An index already above 110 leaves less room to grow. Lenders look at the trend over 12 to 36 months alongside DSCR, and buyers should ask how the competitive set was chosen, since a weak set can flatter the score. A brand change or renovation is often justified by the RGI gap it is expected to close.

A Hypothetical Example

A 180-room select-service hotel in Orlando posts trailing-12-month RevPAR of $92 while its five-hotel competitive set averages $115, a RevPAR Index of 80. Occupancy is in line with the set, so the gap is rate. A buyer underwrites a $3.6 million renovation, or $20,000 per key, to move the index to 95. At the set's current RevPAR, that is about $17 more per available room, or roughly $1.1 million of added annual room revenue. Assuming about 40 percent flows through to NOI, that is about $450,000 a year, a 12.5 percent return on the renovation spend. The buyer prices the hotel on today's income and treats the index gain as upside, not as a given.

From the Desk

A RevPAR Index below 100 isn't automatically a bargain. I want to know why it's low, who picked the comp set, and whether the fix is a capital problem or a people problem.

Run the Numbers

Test the deal before you sign.

What is a good RevPAR Index?

100 means the hotel is earning its fair share of its competitive set. Above 100 means it is outperforming; below 100 means it is underperforming.

What is the difference between RevPAR and RevPAR Index?

RevPAR is the hotel's room revenue per available room. RevPAR Index compares that number with the competitive set's RevPAR, so it removes the effect of the overall market.

What are MPI and ARI?

MPI is the occupancy index and ARI is the ADR index. Together they show whether a RevPAR Index gap comes from too few rooms sold, too low a rate, or both.

Where does RevPAR Index data come from?

Most hotels get it from monthly STR benchmarking reports. Ask the seller for at least 24 months of reports and the list of hotels in the competitive set.

Article Summary

RevPAR Index compares a hotel's RevPAR to its competitive set; 100 is fair share; MPI and ARI explain the gap; buyers should check how the comp set was picked; an index gain is upside, not a given

Key Takeaways

• ✓RevPAR Index compares a hotel's RevPAR to its competitive set.
• ✓100 is fair share.
• ✓MPI and ARI explain the gap.
• ✓buyers should check how the comp set was picked.
• ✓an index gain is upside.

About Michael R. Linton

Michael R. Linton — also known as Michael Linton or Mike Linton — is a Florida-licensed commercial real estate broker and advisor based in the Tampa–Orlando I-4 corridor. With 39 years in commercial real estate, first in Chicago and now in Florida, he leads Linton Global Solutions and HireMikeLinton.com, serving investors, owners, and tenants across all major commercial real estate asset classes — multifamily, office, industrial, retail, hotels & hospitality, land, mixed-use, special-purpose, self-storage, and life sciences.

Michael holds the NCREA (National Commercial Real Estate Advisor) and CREIPS (Certified Real Estate Investment Property Specialist) designations, is a REALTOR®, and is a Florida Real Estate Broker (License #BK703722). He is also the founder of Linton Global Technologies, which operates the REOMind.ai AI-powered REO disposition platform serving a network of banks.

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Works Cited

1. CoStar Group. "STR: Hotel Benchmarking Definitions." STR, https://str.com/data-insights/resources/glossary. Accessed Oct 11, 2026.
2. Visit Florida. "Florida Visitor Estimates." Visit Florida Research, https://www.visitflorida.org/resources/research/. Accessed Oct 11, 2026.
3. Florida Department of Business and Professional Regulation. "License Verification: Michael R. Linton, Florida Broker BK703722." MyFloridaLicense.com, https://www.myfloridalicense.com/wl11.asp. Accessed Oct 11, 2026.

Disclosure & Compliance

Disclosure: This article discusses proprietary technology developed by Linton Global Technologies. Michael R. Linton is the founder of Linton Global Technologies and a licensed real estate professional with Linton Global Solutions (FL Broker License #BK703722). This content is for informational purposes only and does not constitute investment, legal, or financial advice.

Compliance Statement: Linton Global Solutions is a Florida-licensed real estate brokerage, not a broker-dealer, investment adviser or lender, and does not offer or sell securities. CREDDS and REOMind.ai provide decision support only. Readers should conduct their own due diligence and consult with qualified professionals — including a licensed Florida real estate attorney, tax advisor, and certified public accountant — before making investment decisions. Past performance does not guarantee future results.