Profitability data exposes limits of traditional hotel revenue management

Rising costs and weak flow-through are forcing hotels to rethink how revenue success is measured

Recent profitability data from Duetto and HotStats shows that hotel revenue growth is increasingly disconnected from financial performance. While global RevPAR has risen strongly since 2019, the cost of acquiring bookings and ongoing cost inflation—especially labor—have significantly eroded margins. Flow-through rates have fallen well below historical norms, highlighting that revenue growth alone no longer translates into profit growth. The findings point to an urgent need for hotels to integrate cost and profit data directly into revenue management strategies.

Key takeaways

• RevPAR growth masks margin pressure: Global RevPAR is up 19% since 2019, but booking costs have increased even faster, undermining profitability gains.
• Rising costs reduce flow-through: Average flow-through dropped to 18% in the Americas and 29% in Europe in 2025, compared with historical levels closer to 50%.
• Revenue-only strategies increase risk: Hotels focused solely on top-line growth without cost visibility are more exposed to margin erosion.
• Technology gaps limit profitability management: Most hotel tech platforms still separate revenue management from cost and profit analysis, making unified decision-making difficult.
• Integrated revenue and profit tools show results: Hotels using Duetto and HotStats together achieved a 6.8% GOPPAR increase in 2025, outperforming comparable properties.
• Unified commercial strategies are becoming essential: Future success depends on aligning revenue, cost, and profit management into a single, daily operating approach.

Source: Duetto / HotStats

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