KAIUN INSIGHTS / HOTEL ADVISORY
Beyond RevPAR: Cornell Research on Total Hotel Profitability
Research-backed guidance on total revenue management, distribution costs and GOP-oriented hotel decision-making.
What Cornell studied
Cornell’s Center for Hospitality Research published Total Hotel Revenue Management: A Strategic Profit Perspective in 2017. The authors interviewed sixteen senior hotel leaders, revenue-management vendors and solution providers about the shift from rooms-focused pricing toward broader strategic profit management.
The key finding
The research describes a shift from optimizing top-line room revenue to considering customer value, multiple revenue streams, channel costs and bottom-line profitability. It also notes that applying revenue management to restaurants, spas and function space is more complex than managing room inventory.
A property-level example
Consider two hypothetical bookings at the same advertised rate: one carries a high intermediary commission, while another is direct but includes loyalty and marketing costs. Their net contribution may differ materially. A complete analysis compares acquisition costs, incremental service costs and ancillary spending, not just ADR or RevPAR. This example is illustrative, not a reported Cornell result.
How owners can apply the research
Track net RevPAR and GOPPAR alongside occupancy and ADR; evaluate channel contribution; measure F&B outlet profitability rather than sales alone; forecast function-space demand; and examine guest lifetime value without assuming that all additional spending is profitable.
Limitations and original source
The study is qualitative and dates from 2017; it does not prove a universal percentage improvement in GOP. Source: Noone, Enz and Glassmire, Cornell Center for Hospitality Research, https://ecommons.cornell.edu/entities/publication/bc445799-c6ce-4168-b86a-d87bbc25f81a