For years, hotel executives have pointed to rising RevPAR as proof that the industry was back on its feet. Occupancy recovered, rates climbed, and confidence followed. Yet somewhere between the booking engine and the balance sheet, the money has been quietly leaking out.
New global profitability data suggests the uncomfortable truth many hotel owners have sensed but struggled to prove: selling more rooms no longer guarantees better results. In fact, in some cases, it is doing the opposite.
Aggregated figures from HotStats show global RevPAR has risen 19 per cent since 2019. Over the same period, the cost of acquiring those bookings commissions, distribution fees and related expenses has climbed even faster, up 25 per cent per available room. Add stubborn labour inflation and higher operating costs, and the arithmetic becomes unforgiving.
The result is visible in flow-through, the share of revenue that actually reaches the bottom line. In 2025, hotels in the Americas converted just 18 per cent of incremental revenue into profit. Europe managed 29 per cent. Both figures sit well below the roughly 50 per cent flow-through rates the industry once took for granted.
The industry is busier. It is also, in many cases, poorer.
The Old Playbook Is Showing Its Age
None of this should come as a shock. Revenue management has long focused on demand, pricing and occupancy, while costs lived elsewhere, often discussed after the fact, when it was already too late to do much about them.
That separation no longer works. When booking costs rise faster than room rates, and labour absorbs a growing share of every dollar earned, managing revenue in isolation becomes a risk rather than a safeguard.
HotStats’ data shows hotels that pursue topline growth without an integrated view of costs and profit are increasingly exposed to margin erosion. The numbers look respectable. The cash flow does not.
Where Technology Has Fallen Behind
Despite the scale of the problem, much of the industry’s technology stack remains anchored in yesterday’s assumptions. Revenue systems optimise rates. Finance teams analyse profit. Rarely do the two meet in real time.
One company attempting to close that gap is Duetto, which acquired HotStats in 2025 and has since rolled out what it calls a Revenue & Profit Operating System, or RP-OS. The premise is straightforward: pricing decisions should be informed not just by demand, but by what those bookings actually cost to service.
According to HotStats’ aggregated data, hotels using both platforms recorded a 6.8 per cent increase in Gross Operating Profit per Available Room (GOPPAR) in 2025, outperforming comparable peers by 2.1 percentage points. More notably, properties saw an average four-point improvement in the index within a year of implementation.
In an industry where margins are measured in basis points, that kind of movement gets noticed.
A Narrow Margin for Error
As Alex Zoghlin puts it, the problem is no longer theoretical.
“The disconnect between revenue growth and profit conversion is the defining challenge of this market. The data clearly shows that looking at RevPAR in isolation is no longer enough to secure a hotel’s financial future.”
His counterpart at HotStats, Michael Grove, is blunter still.
“With flow-through rates an ongoing challenge, the margin for error is non-existent. The hotels that are winning are the ones that can monitor their costs and profit data in real time and adjust their revenue strategies accordingly.”
That assessment will ring true for owners who have watched strong trading periods deliver disappointing results and struggled to explain why.
What Comes Next for Hotel Strategy
The lesson is not that revenue growth no longer matters. It does. But it matters less than it used to, and certainly not on its own.
Hotel commercial teams are being forced into a more mature conversation, one that weighs distribution costs, labour intensity and operating efficiency alongside demand forecasts. The winners are unlikely to be the loudest adopters of new systems, but the quiet operators who understand precisely where profit is made, and where it is lost.
Duetto plans to continue the discussion at its PERFORM summit on 16 April 2026 in Hollywood Beach, where revenue and profit management will share the same stage, a sign, perhaps, that the industry is finally accepting that the two belong together.
For more information, visit duettocloud.com and hotstats.com.
by My Thanh Pham – (c) 2026.
Read time: 4 minutes.
About the Writer.
My Thanh Pham has worn more travel hats than most luggage racks could hold. After taking a course in travel and tourism, she found herself deep in the business of arranging itineraries across South-East Asia, matching travellers to temples, beaches, and the occasional night train, with a knack for making the complicated look easy.
Not content with life behind the desk, she joined a Vietnamese airline, juggling reservations one day and the frontline bustle of the airport the next. It gave her a ringside seat at the theatre of travel: the missed flights, the joyous reunions, and the endless stories that airports never fail to serve up.
These days, My Thanh has swapped ticket stubs for a writer’s keyboard at Global Travel Media. Her words carry the same steady hand she once brought to bookings, guiding readers through the rich, unpredictable world of travel.
