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owners today; namely, the costs associated with running hotels. According to CBRE, hotel expenses above gross operating profit increased 4.1 % in 2024. Expenses below GOP rose 3.6 %. Total revenue, meanwhile, grew 2.4 %. The upshot: Costs are outdistancing revenue and the pace isn’ t waning.
In an era where costs are eating up the bottom line at an unprecedented speed, a shift in mentality from a revenue-only focus to one predicated on cost containment and profitability drive is paramount. Duetto, with roots as a revenue-management platform that has leaned further into profit optimization, held its“ PERFORM” summit in Florida in April, a way to showcase its technology while also engaging with customers and partner tech. The message is clear: In an era of expense creep and stagnating revenue, a focus on total profit
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optimization isn’ t only smart, it’ s compulsory.
Data backs up a profitminded approach. According to Duetto, over the last six years, RevPAR growth has climbed 19 % against a backdrop where booking costs and labor costs have risen 25 % and 20 % in the same span, respectively. From 2024 to 2025, total revenue per available room, or TrevPAR, increased 3.6 %. The bad news: expenses associated with credit card commissions paid, IT systems, sales and marketing, loyalty programs and P & M supplies and labor have all risen above 5 %. The math, as they say, doesn’ t math.
Alex Zoghlin, CEO of Duetto, was hired last June, three months after Duetto made a strategic investment to acquire HotStats, a firm dedicated to benchmarking profitability. The profit strategy was underway—
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it’ s something he said as much during the summit.“ Most of the KPIs that we all still use focus on revenue, which do not incentivize looking at the bigger picture,” he said.“ The way that we operate needs a new playbook— this really starts by shifting the focus from room revenue and yield to overall hotel performance.”
Historically, RevPAR, a metric that measured how much revenue was generated per room, but discounted revenue coming from other sources, was the mostrelied-upon barometer of a hotel’ s performance, an easy calculation of rate and occupancy. The more complex hotels got, the more food and beverage became a focal point, the more meetings business— the more ancillary opportunities— the less reliant RevPAR became as a KPI to
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explain the totality of a hotel’ s performance, especially since it also didn’ t take expense items into account.
“ Today, two hotels with identical RevPAR can have completely different profitability,” said Zoghlin, offering that one could be superior in driving direct business, while managing acquisition costs, keeping margins intact.“ The other,” he said,“ watches profits bleed out.”
The destination might be the same, but getting to it can be straightforward or circuitous. Consider two hotels with the same $ 100 RevPAR: It doesn’ t mean that both hotels will net the same profit. If hotel A gets to a $ 100 RevPAR with an occupancy approach that requires more labor, then its gross operating profit per available room will surely be lower than the hotel that builds
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Michael Grove, CEO of HotStats, which Duetto acquired in April 2025. |
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May / June 2026 hotelsmag. com 69 |