Hotel Budget Season 2027: A Global Snapshot | Duetto
Every region heading into the 2027 budget season tells the same story at the aggregate level: revenue is growing, and margins are — on average — expanding too. Look one…
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[email protected] (Duetto Content Team)
27 posts
Duetto and RaizUp Launch Revenue Leadership Program Focused on Profit-Centric Performance Engineering in Hospitality
💸 Revenue management roles are evolving beyond traditional forecasting, focusing on profit, not just RevPAR. Performance engineering, a new discipline, centers decision-making on profitability by incorporating metrics like GOPPAR and TRevPAR. The RLP, an eight-week program starting October 20, 2026, aims to develop commercial leaders fluent in profit-centric strategies. Duetto and RaizUp sponsor the program, emphasizing profit fluency, cross-functional influence, and data-driven decision-making to bridge the skill gap in commercial leadership.
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Hotel Budget Season Runs from Q3 to Early Q4; RevPAR Up 19% Since 2019 but Costs Outpace Revenue
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💸 Hotel budget season runs from Q3 to early Q4 (September-November), setting next year’s financial plans. Since 2019, RevPAR increased by 19% but booking costs rose 25%. Performance engineering is key to aligning investments with profit, not just revenue. Tools like Duetto's RP-OS and GameChanger optimize revenue independently. Prioritize profit in budget cases for CFOs, CTOs, GMs, and owners. Attend the "Building a Business Case for Hotel Technology Investment" webinar on September 2.
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Hotel Industry Shifts Towards Profit-Centric Strategies by Overcoming Three Key Barriers with Advanced Data Tools
💸 Michael Grove and Nick Knight identify three barriers preventing hotels from shifting from a revenue-focused to profit-centric strategy: flawed incentive structures, fragmented data access, and operational challenges. They stress the importance of using metrics like GOPPAR and TRevPAR over RevPAR. Duetto's tools, such as Advance and HotStats, offer AI-driven insights for rapid decision-making. Adopting a profit-centric framework, or "performance engineering," aligns commercial decisions, boosting profitability and refining financial strategies.
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Duetto Unveils Enhanced Features for Advance, Streamlining Revenue Management with AI-Powered Demand Intelligence Tools
📊 Advance, a demand intelligence tool, enhances decision-making by analyzing data from PMS, Amadeus Demand360, and Predict HQ. Key updates include AI-driven insights, a 90-day heat map, on-demand date analysis, and email alerts. Dynamic Optimization checks demand every 30 minutes, optimizing rates automatically. Revenue teams save over 10 hours weekly, using Advance to streamline workflows and drive performance, as highlighted by Coast Hotels' Nathan Gray.
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US Hotels Face Rising Labor Costs, Now 43% of Revenue at Unionized Properties, Challenging RevPAR Focus
📈 US hotels' labor costs hit $123 billion in 2024, marking a 20% rise from 2019. Labor at unionized hotels now consumes 43% of revenue compared to 33.5% at non-union hotels. Optimal hotel profitability is at 65-70% occupancy, not maximum. CPOR became crucial in 2025; labor costs per room rose between 2% and 11.2%. Hotels achieving profit focus on CPOR and GOPPAR metrics, aligning revenue with operational efficiency, rather than solely RevPAR.
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Hotels Urged to Adopt 'Performance Engineering' for Profit-Focused Operations Amid Declining 2025 Flow-Through Rates
🛀 2025: hotels faced intense margin pressure, with The Americas' flow-through rates dropping to 18%. Labor and operating costs surged while booking behaviors shifted. Despite RevPAR increases, profitability declined, revealing its limitations as a metric. The industry needed a shift towards performance engineering, a discipline embedding profit-led operations. This requires four shifts: expanding datasets, aligning team mindsets, connecting actions to insights, and employing the right technology. The new approach focuses on GOPPAR for total profitability, not just revenue.
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Hotels Must Shift Focus from RevPAR to Profitability Metrics like GOP Index for Sustained Financial Health
💰 A room sold at $150 through Booking.com nets $120-$127 after a 15-20% commission, compared to $150 from a direct sale. RevPAR doesn’t show the $23-$30 revenue gap. Occupancy-driven growth yields 30% profit flow-through, while rate-driven growth delivers 50-60%. GOP Index benchmarks profitability against competitors. TRevPAR accounts for total revenue, including ancillary services. Benchmarking infrastructure now supports full P&L metrics. Performance engineering focuses on overall hotel profitability, aligning team decisions with profit impact.
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Rising Costs and Distribution Complexity Undermine RevPAR's Effectiveness in Measuring Hotel Profitability, Industry Experts Urge Shift to GOPPAR.
📈 RevPAR, adopted 25 years ago, faces challenges as US hotel labor costs rose 20% from 2019-2024, and OTA commissions take 15-20% per booking. This metric correlates with GOPPAR, but not linearly; a small RevPAR change leads to a 1.5 to 2.0 times larger GOPPAR change. RevPAR growth of $5 through occupancy sees 30% profit flow-through, versus 60% through rate growth with stable occupancy. The shift to profit-centric metrics like GOPPAR is crucial.
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Growing Hotel Portfolios Face Challenges Without Revenue Management Systems, Impacting Profitability as RevPAR Outpaces Costs
🏨 Since 2019, global RevPAR grew 19% while booking costs per room rose 25% and labor costs increased by 8–11% annually. Many hotel portfolios struggle with manual revenue management, slowing decisions and reducing profit visibility. A modern Revenue Management System (RMS) addresses these challenges, ensuring consistent pricing logic, scalable workflows, and improved coordination without adding complexity. Investing in an RMS before operational issues arise can enhance revenue strategy and profit outcomes across multiple properties.
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