For decades, hotel revenue management has focused on one primary goal: maximizing revenue by selling the right room, at the right price, at the right time.
But revenue is only half the story. The other half is profitability.
A room sold at a high ADR isn’t necessarily a profitable room. If acquisition and operating costs are too high, more revenue won’t always flow to the bottom line.
When costs grow faster than revenue, profit margins shrink. Data from HotStats and Duetto shows that while global hotel RevPAR grew 19% between 2019 and 2025, the cost of acquiring those bookings increased by 25%.
Today, as hotel labor, energy, and distribution costs continue to rise, revenue leaders are expanding their focus beyond revenue to profitability.
Breaking down the key types of costs
Hotel costs generally fall into three categories:
Acquisition costs: Expenses associated with generating bookings, including OTA and travel agency commissions, marketing expenditures, and website booking engine fees.
Fixed costs: Expenses that remain largely unchanged regardless of occupancy, including mortgage payments, property taxes, insurance, technology costs, and management salaries.
Variable costs: Operational expenses that vary with occupancy, such as housekeeping and front desk labor, guest amenities, laundry, and utilities.
While revenue managers have limited control over fixed and variable costs, they can ensure room rates cover those costs. They can also actively manage acquisition costs through pricing and distribution strategies.
Why profitability is even more important than revenue
Hotels traditionally rely on three key metrics to measure revenue performance: occupancy, ADR (Average Daily Rate), and RevPAR (Revenue per Available Room).
However, not all revenue is created equal. Every booking contributes differently to the bottom line. The profit generated from a booking depends on how it was acquired, how long the guest stays, and how much they spend on property.
For example, a room booked through an OTA at a rate of €220 may generate less profit than the same room booked directly through the hotel’s website at €205 once commission costs are deducted.
Some costs are less obvious. In 2025, 21.8% of OTA bookings were canceled, compared with only 10.6% of direct bookings, according to Cloudbeds research. Higher cancellation rates increase uncertainty and can reduce profitability.
OTA Booking | Direct Booking | |
Room Rate | €220 | €205 |
Commission (18%) | €39.60 | €0 |
Net Room Revenue | €180.40 | €205 |
En savoir plus : Comment augmenter le RevPAR des hôtels : 8 stratégies éprouvées pour 2026
3 profitability metrics for revenue managers
Tracking profitability is more challenging than tracking revenue because it’s not always possible to know all the associated costs at the time of booking. That’s why many profitability calculations are performed by the finance department at month-end.
Even so, revenue managers should have a good understanding of the costs and profit potential associated with different types of business. Three key profitability metrics can help.
Marge bénéficiaire
The percentage of total hotel revenue that becomes profit.
Calculation: Profit ÷ Revenue × 100
Net Revenue per Available Room (Net RevPAR)
The net room revenue generated per available room after acquisition costs have been deducted.
Calculation: (Room Revenue − Acquisition Costs) ÷ Available Rooms
Gross Operating Profit per Available Room (GOPPAR)
The average operating profit generated by each available room. This metric matters most to full-service properties with ancillary revenue streams like restaurants and function space.
Calculation: GOP ÷ Available Rooms
Together, these metrics provide a more complete picture of hotel profitability than revenue metrics alone.
En savoir plus : 6 indicateurs clés de performance importants qui vont au-delà du RevPAR
7 ways to increase profitability
So, how can revenue managers increase profitability? Here are seven practical strategies.
1. Target your most profitable business
Consider acquisition and servicing costs, length of stay, and ancillary spend when evaluating different types of business. Prioritize guests, market segments, and booking channels that generate the greatest long-term profit – not simply the highest room rate.
2. Price with profit in mind
Set room rates strategically to protect your margins while responding dynamically to changes in demand. Avoid unnecessary discounting that erodes profitability.
3. Encourage longer stays
Availability controls, such as minimum length of stay requirements, can help increase average length of stay while reducing servicing costs per occupied night.
4. Optimize your distribution mix
Encourage direct bookings and reduce reliance on high-cost channels. During periods of strong demand, consider closing lower-value rate plans or distribution channels.
5. Maximize the value of every room sold
Increase guest spend by creating packages and upselling services such as breakfast, parking, and late checkout. Adjust pricing increments to sell premium room types instead of giving them away as complimentary upgrades.
6. Leverage revenue technology
Un modern revenue management system (RMS) can improve profitability by optimizing pricing and availability controls, responding automatically to changes in demand, and supporting smarter distribution decisions – all while reducing manual work.
7. Cultivate a profitability mindset
Work with teams across the hotel – from front desk and housekeeping to marketing and sales – so everyone understands how their decisions impact profitability.
Le bilan
Today’s revenue leaders know it’s not enough to fill rooms, and they understand that room rate is only part of the story.
They focus on selling the right room, to the right guest, at the right price, through the right channel – et for the highest possible profit.
That’s how hotels move beyond maximizing revenue to maximizing profitability.
Want to learn how RoomPriceGenie can help your property increase profitability? Chat with one of our revenue experts today.
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