The Hotel Pricing Words Nobody Explained to You
A plain-English decoder for ADR, RevPAR, MPI, ARI, RGI, pace, pickup, MLOS and the rest — with the formula, the sentence, and why each one matters.
Hotel pricing jargon is mostly three ideas wearing eighteen different names: how full you are, what you charged, and how those two compare to the hotels around you. Occupancy, ADR and RevPAR carry the weight. Everything else — MPI, ARI, RGI, pace, pickup, MLOS, CTA — is a refinement on one of those three. This post gives you the formula, a plain sentence, and why it matters, for every term you are expected to already know.
Say the quiet part first
Operators say the same thing on forums every week: they were promoted into pricing, everyone assumed they already knew the vocabulary, and now it is too late to ask. So they nod through meetings and reverse-engineer the meanings later.
That is a vocabulary problem, not an intelligence problem. The terms are simple. They are just never defined out loud, because the people using them learned them the same awkward way.
Read the table once. Come back to it when a word ambushes you.
The three numbers everything else is built on
Occupancy is rooms sold divided by rooms available, as a percentage. Forty rooms sold out of fifty available is 80%.
ADR — average daily rate is room revenue divided by rooms sold. Note the word room: it is room revenue only, not food, not parking, not fees.
RevPAR — revenue per available room is room revenue divided by rooms available, which is the same as ADR × occupancy. It is the only one of the three that cannot be gamed by ignoring the other. These are STR/CoStar's official definitions, and they are what your benchmarking report uses.
The full decoder table
| Term | Formula | In plain English | Why it matters |
|---|---|---|---|
| Occupancy | rooms sold ÷ rooms available × 100 | How full you were | Easy to hit by cutting price — never read it alone |
| ADR | room revenue ÷ rooms sold | What the average sold room went for | Excludes fees and non-room revenue by definition |
| RevPAR | room revenue ÷ rooms available (= ADR × occupancy) | What each room you own earned, sold or not | The industry's default scorecard |
| Comp set | — | The 6–10 nearby hotels you actually lose bookings to | Every index below is measured against it |
| MPI | (your occupancy ÷ comp occupancy) × 100 | Your share of the market's rooms sold | Above 100 = you fill better than your comp set |
| ARI | (your ADR ÷ comp ADR) × 100 | Your share of the market's rate | Above 100 = you hold rate better |
| RGI | (your RevPAR ÷ comp RevPAR) × 100 | Your overall share of revenue | 100 = fair share; the number owners ask about |
| Pace | rooms on the books vs a benchmark date | How fast a future date is filling | Tells you to move rate before the date arrives |
| Pickup | rooms on books now − rooms on books at last snapshot | What you sold since you last looked | A net figure — cancellations are already subtracted |
| ALOS | room nights ÷ number of bookings | Average length of stay | Longer stays cost less to service per night |
| CPOR | variable room costs ÷ rooms sold | What one more sold room actually costs you | Your rate floor sits above this |
| TRevPAR | total revenue ÷ rooms available | RevPAR including F&B, spa, parking | Catches revenue RevPAR ignores |
| GOPPAR | gross operating profit ÷ rooms available | Profit per room you own | The only one that reflects cost of sale |
| BAR | — | Best available rate: your standard unrestricted rate | The reference point every discount hangs off |
| MLOS | — | Minimum length of stay on a given arrival date | Stops one-night bookings blocking a busy weekend |
| CTA | — | Closed to arrival: guests may stay through, not check in | Protects a peak night without shutting the date |
| OTA | — | Online travel agency — Booking.com, Expedia and the rest | Commission makes their bookings worth less than direct |
| Rate parity | — | A contract clause requiring the same rate everywhere | Now prohibited in the EEA — see below |
| Booking window | arrival date − booking date | How far ahead guests book | Sets how early your pricing decisions need to happen |
| Displacement | revenue given up by taking one booking over another | The cost of saying yes to the wrong business | The real question behind every group inquiry |
The index numbers, and the one bit of arithmetic worth knowing
Index numbers all work the same way: your number, divided by your comp set's number, times 100. Score 100 and you took exactly your fair share.
The useful part is that they decompose. RGI ≈ (MPI × ARI) / 100. So if your RGI is 96, you can see immediately where it came from. An MPI of 118 with an ARI of 81 is a completely different business from an MPI of 82 with an ARI of 117.
The first hotel is buying occupancy with rate. The second is holding rate and losing volume. Both show up as "slightly below fair share" until you split them.
One practical note: STR requires at least four reporting hotels in a comp set, so very small markets sometimes cannot produce these numbers at all.
The restriction words are just three switches
BAR is your standard rate with no strings attached. MLOS refuses bookings shorter than a set number of nights on a given arrival date. CTA lets a guest stay through a night but not check in on it.
MLOS protects a sold-out Saturday from being chopped up by one-nighters. CTA protects it while still welcoming the guest who arrives Friday and stays two nights. Used carelessly, both push business to the hotel next door — the trade-off is real.
Two definitions that quietly change your numbers
Complimentary rooms are excluded from rooms sold and from ADR under STR's definitions. If you count comps as sold, your occupancy flatters and your ADR sinks, and neither will match your benchmark report.
Resort, destination and urban fees are Miscellaneous Income under the 12th edition of USALI, whose compliance date was 1 January 2026. They are not room revenue. They do not raise your ADR or your RevPAR — so a hotel quoting ADR "including fees" is quoting a number nobody else can compare.
On rate parity: the European Commission designated Booking.com a gatekeeper under the Digital Markets Act on 13 May 2024, with compliance from 14 November 2024. Wide and narrow parity clauses are prohibited in the EEA, and hotels there may price lower on their own site.
What the adoption data says about which words matter
Not all of these terms are equally used. A 2018 study by HSMAI APAC with the Singapore Institute of Technology measured metric adoption across hotels: RevPAR 77.4%, RGI 48.5%, GOPPAR 20.4%, TRevPAR 13.7%.
GOPPAR is the better business metric — it is the only one that notices what a booking cost you to acquire. It stays rare because there is no universal external benchmark for it. RevPAR persists because everyone reports it the same way.
So learn GOPPAR for your own decisions, and expect RevPAR in every conversation with an owner, a lender or a benchmarking report.
The mistakes these words cause
Quoting ADR with fees folded in. It is not a like-for-like number, and USALI says so.
Reading MPI as success. High MPI with low ARI usually means you discounted your way to a full house.
Treating pickup as gross sales. Pickup is net. A week showing +4 could be eleven bookings and seven cancellations.
Using MLOS as a default. A two-night minimum on a shoulder weekend can empty the date entirely.
Comparing your RevPAR to a national average. CoStar reported US full-year 2025 occupancy at 62.3%, ADR $160.54 and RevPAR $100.02 — a useful headline, and irrelevant to your specific market.
The bottom line
Occupancy, ADR and RevPAR are the spine. The index family tells you how those three compare to the hotels you actually compete with. RGI ≈ (MPI × ARI) / 100 then tells you which half of your position is doing the work. Pace and pickup are about time, not performance. BAR, MLOS and CTA are switches. GOPPAR is the number that knows what the booking cost you.
Nobody was ever going to sit you down and explain these. Now they are written down.
If you would rather have the index numbers calculated than derive them by hand, our analytics and reports module puts your ADR, RevPAR and occupancy against the market. STAR-style MPI, ARI and RGI benchmarks sit in the same view.