MPI, ARI and RGI: index measures against the competitive set, explained

MPI, ARI and RGI express a hotel's occupancy, average daily rate and RevPAR as a percentage of its competitive set's, where 100 means the hotel matched the set. Fair share is the hotel's rooms as a share of the set's rooms, and the RevPAR index, RGI, equals MPI multiplied by ARI, divided by 100.

The benchmark report arrives with three numbers and no explanation. One sits above 100, one below, and the third decides whether the month was actually good. After reading this article you will be able to compute each index yourself, check that the three reconcile, and spot the readings that look healthy but are not.

What are MPI, ARI and RGI in hotel benchmarking?#

They are three ratios that put a hotel's occupancy, average daily rate and RevPAR on the same scale as its competitive set, with 100 meaning the hotel exactly matched the set.

The competitive set comes first: the named group of rival hotels a property chooses to be measured against, usually similar in location, segment, star level and room count. Choosing it well is a discipline of its own, covered in our guide to choosing a hotel competitive set.

Fair share is the hotel's rooms divided by the set's total rooms. For example, a 120-room hotel inside a 1,200-room set holds a 10% fair share. Every index follows one pattern: the hotel's own figure divided by the set's figure, multiplied by 100. Above 100 means ahead of the set, below 100 means behind it.

The three indices answer different questions. MPI asks who sold the rooms, ARI asks who got the higher rate, and RGI asks who earned more revenue per available room.

An index is relative, so it can improve while the property gets worse, if the set falls faster. That is the single most common misreading. And because the set is the denominator, the choice of set decides the answer: changing the set changes the index without anything changing on the property.

How is MPI (market penetration index) calculated?#

MPI is the hotel's occupancy divided by the set's occupancy, multiplied by 100, and it is identical to the hotel's share of the set's sold room nights divided by its fair share.

In room nights, the formula is (hotel rooms sold ÷ hotel rooms) ÷ (set rooms sold ÷ set rooms) × 100. For example: a 120-room hotel sells 90 rooms, so 75% occupancy. The 1,200-room set sells 840 rooms, so 70%. MPI is 75 ÷ 70 × 100, about 107.

MPI worked in room nights#

The same example in share terms: the hotel holds 90 of 840 sold room nights, about 10.7% of the set's demand, against a 10% fair share. The ratio is again about 107.

MPI above 100 means the hotel captured more than its fair share of the room nights actually sold in the set. It says nothing about the price paid for them. MPI is moved by length of stay, channel mix, group and contract business, and how much discount the hotel is willing to give, which makes it the easiest index to inflate.

MPI cannot be computed from public rates. It needs competitors' rooms sold, which only a shared benchmarking report supplies. For the underlying occupancy and rate formulas, see our piece on occupancy rate, ADR and RevPAR.

How is ARI (average rate index) calculated?#

ARI is the hotel's average daily rate divided by the set's average daily rate, multiplied by 100, where average daily rate is room revenue divided by rooms sold.

For example: the hotel's ADR is 2,000 and the set's ADR is 2,200, so ARI is 2,000 ÷ 2,200 × 100, about 91. The hotel charged roughly a tenth less than its set.

ARI above 100 means the hotel charged more than the set on average. That is often the result of selling fewer rooms, so read it next to MPI, never alone.

The comparison is only valid like for like: same room type, same dates, same board basis, same cancellation terms. A flexible rate and a non-refundable rate are not the same product. Decide once whether you compare gross or net of commission and whether city tax or VAT is included, then keep that convention across every period.

When set members quote in different currencies, convert at one stated rate on one stated date and record the convention, because a moving exchange rate can move ARI on its own. Rate shopping can approximate ARI, but only if the shopper matches room type, date, board and terms, and weights each competitor by its room count rather than treating every rate equally.

How is RGI (RevPAR index) calculated, and how do MPI and ARI combine?#

RGI is the hotel's RevPAR divided by the set's RevPAR, multiplied by 100, and it is exactly MPI multiplied by ARI and divided by 100.

RevPAR is occupancy multiplied by average daily rate, or room revenue divided by available rooms. It is the revenue each room earned whether or not it was sold. Continuing the example: the hotel's RevPAR is 0.75 × 2,000 = 1,500. The set's is 0.70 × 2,200 = 1,540. RGI is 1,500 ÷ 1,540 × 100, about 97.

Because RGI is a product, a gain in one index can offset a loss in the other. That is why the headline number alone cannot tell you what the hotel did. RGI is the fairest single summary of revenue performance against a set, and the least informative on its own: always read the pair behind it.

RGI is a revenue measure, not a profit measure. It ignores commission, cost of sales, board basis and payroll, so it can rise while margin falls.

Where do the index numbers actually come from?#

MPI and RGI require competitors' rooms sold and room counts, which only come from a shared benchmarking report in which hotels voluntarily submit their figures; a hotel's own rate checks can only approximate ARI.

In a shared benchmarking report, each participating hotel submits its room count, rooms sold and room revenue for the period. The provider aggregates them into set totals and returns the set's occupancy, ADR and RevPAR, not each rival's individual figures. Participation is voluntary, so coverage varies by city and season. The set inside the report is whatever the provider could assemble, which may not be the set the hotel would choose.

A hotel's own rate checks see published and available rates, never bookings. Without competitors' rooms sold, MPI and RGI cannot be produced, only guessed. Rate checks can approximate ARI if the shopper matches room type, date, board basis and cancellation terms, and weights competitors by room count.

Do not assume that hotels in Türkiye share figures through any particular service or association. Ask the provider what is submitted, who else is in the set, and how the set is weighted. Choosing and defending the set is a separate discipline, covered in the article on building a competitive set and comparing rates fairly.

Why can an index above 100 still hide a loss?#

Because an index measures position against the set, not money earned, and a high MPI bought with low rates can leave RevPAR and margin behind the set even while the headline looks healthy.

For example: MPI 130 with ARI 81 gives an RGI of about 105. The hotel is ahead of the set on revenue per room, but it is filling rooms with discount and charging roughly a fifth less than rivals.

The set can also fall faster than the hotel. If the whole set loses occupancy in a weak month, the hotel's index rises even though its own RevPAR fell. The index ignores cost: commission, board basis, cost of food and beverage and payroll all sit outside it, so a high RGI can coexist with a weak profit per room.

Small sets are noisy. In a set of five hotels, one rival's renovation or closure moves everyone else's index without any commercial change. A set that quietly gains a weak or a strong member shifts the denominator for every remaining hotel, which is why set changes must be logged and dated.

Read the three indices as a story: who sold the rooms, at what price, and what that produced. Then check profit separately, as explained in GOPPAR and when RevPAR misleads.

Which pitfalls distort MPI, ARI and RGI?#

A changing set, mismatched board bases, all-inclusive packaging, currency conversion and room-count changes each move the denominator, and a moved denominator moves the index.

Board basis is the biggest one in resort markets. A bed and breakfast rate, a room-only rate and an all-inclusive rate are different products. An all-inclusive rate bundles food and drink into the room price, so its ADR is not comparable with room-only. If the set cannot be made like for like, state the distortion and keep the same mix over time, so the trend stays readable even if the level does not.

Currency: fix one conversion convention and one rate source, and apply it to the hotel and the set on the same date. Room count: a new block, a closed floor or a renovation changes both the hotel's available rooms and its fair share, so record the date of any change. Set membership: keep the set stable across at least a full season, and log every addition or removal with its date so a step change in the index can be explained.

Never compare a hotel's index with the Ministry of Culture and Tourism's published annual occupancy rate for certified facilities. The populations differ and the published definition is not stated, so the two numbers do not describe the same thing. Use the indices inside a fixed rhythm, in the same meeting, with the same set and the same conventions, so a movement means something, as described in our guide to the weekly revenue meeting and its decision log.

What to do next#

Before the next benchmark report is discussed, write down the set, the board basis, the currency convention and the room counts, then check that the three indices reconcile through RGI = MPI × ARI ÷ 100. Do that once and the report stops being three unexplained numbers and becomes a short, readable account of what the hotel did against its rivals, which is the only thing an index can tell you.