What's Happening?
The hotel industry is experiencing a significant gap between revenue growth and profitability, as highlighted by a joint performance analysis from Duetto and HotStats. Since 2019, Global RevPAR has increased by 19%, but Booking Costs PAR have surged by 25%, leading to a decline in flow-through rates. This disparity, exacerbated by high labor cost inflation, has resulted in average flow-through rates of 18% in the Americas and 29% in Europe for 2025, compared to previous levels of around 50%. Duetto's acquisition of HotStats in 2025 and the introduction of their Revenue & Profit Operating System (RP-OS) have shown promise, with users achieving a 6.8% increase in GOPPAR. The analysis underscores the need for hotels to integrate cost and profit management
into their revenue strategies to prevent margin erosion.
Why It's Important?
The widening gap between revenue and profit in the hotel industry highlights the critical need for a shift in revenue management strategies. As costs, particularly labor, continue to rise, hotels that fail to incorporate cost management into their revenue strategies risk significant margin erosion. This situation underscores the importance of adopting comprehensive tools like Duetto's RP-OS, which can help hotels make informed decisions that enhance profitability. The industry's ability to adapt to these challenges will determine its financial stability and competitiveness in the long term.
What's Next?
Duetto plans to continue sharing insights at its global summit on profit and revenue management, scheduled for April 2026 in Florida. This event will likely focus on strategies to bridge the gap between revenue growth and profitability, offering industry leaders a platform to discuss innovative solutions. As hotels strive to improve their financial performance, the adoption of integrated revenue and profit management systems will be crucial. Stakeholders, including hotel owners and operators, will need to prioritize investments in technology that supports a unified approach to revenue and cost management.
