The following is a guest post from Matthew Prosser, senior director at hospitality software company Agilysys. Opinions are the author’s own.
For decades, RevPAR has been the industry standard for measuring hotel performance. It has driven strategy, guided investments and shaped operations. However, in 2025, RevPAR’s limitations are clear. The metric focuses exclusively on room occupancy, creating a ceiling for revenue generation — once a property is fully booked, growth stalls.
In contrast, by looking at revenue beyond the room and considering new-age metrics such as revenue per available guest, or RevPAG, hotels can unlock new opportunities by shifting the focus to individual guests. By considering all revenue streams, RevPAG offers a fuller view of profitability. This shift reframes value creation around the guest.
This evolution mirrors successful transformations in other industries. Take Uber: by shifting from a simple ride-maximization model to a customer-centric ecosystem, the company revolutionized its revenue potential. Where it once saw passengers, it now sees customers engaging with food delivery, alternative transportation and various lifestyle services. Hospitality can similarly view each guest as a broader revenue opportunity.
The urgency for this transformation is clear. In a recent Agilysys survey, 82% of hospitality executives acknowledged RevPAR’s limitations in capturing modern revenue opportunities. The study revealed a striking contrast in the luxury sector, where non-room revenue now accounts for up to 40% of total revenue — highlighting untapped potential. Yet, 56% of properties lack the technology to bridge this gap.
Personalization: the key to unlocking RevPAG
The power of personalization in driving revenue is increasingly evident across the hospitality sector. The Agilysys 2024 APAC Hospitality Impact Study reveals that 68% of APAC travelers are willing to spend more on tailored experiences, a trend mirrored globally. Guests increasingly expect personalized dining and wellness offerings.
To achieve this, hotels must leverage data effectively. A unified platform that integrates property management systems with tools like point-of-sale and customer relationship management systems enables a 360-degree view of the guest. This allows hotels to deliver tailored offers, such as a spa discount during a stay or a personalized welcome amenity for a returning guest.
The study further highlights that 73% of guests are willing to spend up to 30% more on post-booking upgrades when personal touches are evident. Centralizing guest data through a single profile enhances the ability to deliver these tailored experiences, unlocking untapped revenue streams and driving profitability.
Redefining general manager incentives to drive RevPAG success
To fully embrace RevPAG’s potential, aligning general manager compensation with total guest revenue is essential. Traditionally tied to RevPAR, general manager incentives have often focused on room occupancy, overlooking revenue opportunities across dining, wellness and other services. Shifting incentives to metrics like RevPAG motivates general managers to adopt strategies that maximize revenue across the entire guest journey, fostering a holistic approach to profitability.
This shift not only incentivizes general managers to view non-room services as integral to the guest experience but also drives alignment across teams. Advanced analytics systems equip general managers with insights to design tailored experiences, amplifying revenue potential. By redefining incentives, hotels enhance both guest satisfaction and profitability, laying the groundwork for long-term success.
Transforming fragmented systems to a unified ecosystem
Today’s hospitality technology landscape often resembles a collection of disconnected tools, much like the pre-smartphone era when people carried separate devices for different functions — a phone for calls, an iPod for music and a GPS for navigation.
Like smartphones, modern property management systems unify and optimize data. Just as a smartphone allows users to seamlessly discover a restaurant while walking by, check its reviews, text the location to friends who can instantly navigate there using GPS — all within one integrated device — modern property management systems enable similar interconnected experiences in hospitality.
Similarly, an integrated property management system creates this seamless flow of information and services for hotel operations. It enables hoteliers to monitor and respond to guest activities across all touchpoints in real time. Whether a guest is ordering room service, booking a spa treatment or making a restaurant reservation, each interaction is captured and analyzed within a single ecosystem. This unified approach enhances RevPAG measurement, as hotels can track guest spending patterns and preferences across their entire stay.
Unified systems boost guest satisfaction and operational efficiency. Data shows these properties see an average increase of 25% in non-room revenue opportunities compared to those operating with disconnected solutions.
Seizing the guest-centric future
The shift to RevPAG represents more than a change in metrics — it’s a transformation in how hotels create and capture value. Success in this new era requires a strategic combination of integrated technology, personalized experiences and operational innovation. For hoteliers ready to embrace this change, the rewards are clear: increased revenue, stronger guest loyalty and sustainable competitive advantage.
By making this transition now, hotels can lead the next hospitality revolution — where success is measured in total value created for every guest.
