Turn Real Hotel Data into Unreal Performance - powered by Duetto
Summary
Michael Grove, CEO of HotStats at Duetto, delivered a data-driven presentation at ITB Berlin 2026 analyzing the widening gap between hotel revenue growth and profit margins across Europe, the US, and globally. Drawing on 20 years of P&L benchmarking data collected from hotels worldwide, Grove argued that the industry's longstanding obsession with RevPAR is insufficient and increasingly dangerous as cost headwinds accelerate faster than top-line growth.
Grove opened with European hotel performance data comparing total revenue per available room, labor costs per available room, and gross profit per available room across major markets in 2025 vs. 2024. The key finding: in almost every European market except Switzerland and Poland, labor costs grew faster than revenues. Poland was highlighted as a standout performer for two consecutive years. Northern European stabilized markets showed the most strain.
On the revenue side, rooms revenue growth was described as minimal year-over-year, while ancillary revenue streams showed significantly stronger performance. Golf resorts have seen strong performance for 3-4 consecutive years. Wellness (spas, health clubs) was called out as a major opportunity where guests are demonstrably willing to spend more. CMBB (conferences, meetings, banquets, and banqueting) trends were described as fairly positive given hybrid work trends. Most notably, the 'other ancillary' revenue category grew 5.2% — more than double the rate of rooms revenue growth.
For the US specifically, Grove reported that only 12% of incremental revenue fell to the bottom line (vs. approximately 30% in Europe). US total revenue grew 2.6%, but virtually every key expense line exceeded that growth rate. The main cost headwinds identified: credit card commissions, IT expenses (driven partly by the shift from capex servers to recurring SaaS subscriptions), sales and marketing expenses, and loyalty program costs — all described as largely structural and difficult to control.
Grove introduced a critical threshold finding: in Europe, a hotel must achieve at least 3% total revenue growth year-over-year just to keep profitability flat or improve margin. Markets below that threshold are effectively losing margin regardless of absolute revenue performance.
A counterintuitive finding emerged from segment analysis: the focus/limited-service segment, typically seen as more cost-efficient, actually saw a profitability decline in 2024-2025, while resort properties — the most operationally complex and cost-exposed segment — saw the strongest profit growth. Grove used this as evidence that having more revenue levers (ancillary, F&B, wellness, golf) is a more durable profit protection strategy than cost-cutting alone.
Grove concluded by presenting the strategic rationale for the HotStats-Duetto merger (completed in the prior year): HotStats had long provided the benchmarking data telling hotels to look beyond RevPAR, but lacked the operational tools to act on those insights. Duetto's revenue management system completes that loop — enabling hotels to identify P&L opportunities, set strategy, execute via RMS tools, and measure improvement against benchmarks.
Key Takeaways
- •In almost every European market in 2025 vs. 2024, labor costs grew faster than revenues — only Switzerland and Poland were exceptions. This is described as a multi-year trend with no easy resolution.
- •Poland is the top-performing European hotel market for profitability growth, cited as a standout for two consecutive years running.
- •Ancillary 'other' revenue grew 5.2% year-over-year — more than double the rooms revenue growth rate — making it the single most compelling near-term opportunity for European hoteliers.
- •Golf resorts have seen strong performance for 3-4 consecutive years; wellness (spas, health clubs) is another high-willingness-to-pay category where guests are actively increasing spend.
- •In the US, only 12% of incremental year-over-year revenue reached the bottom line in 2024-2025. In Europe the figure starts at approximately 30%, partly due to lower energy costs (though Grove warned energy costs may rise again).
- •US total revenue grew 2.6% but every major expense category — credit card commissions, IT, sales and marketing, loyalty programs — grew faster, creating structural margin compression that hoteliers have little direct control over.
- •The shift from on-premise servers (capex) to cloud/SaaS subscriptions (opex) is a hidden driver of rising IT expense on the P&L — costs that previously sat outside operating accounts now erode operating margin directly.
- •Grove's critical data point: European hotels need at least 3% total revenue growth year-over-year just to keep profitability flat. Any hotel growing below that threshold is losing margin.
- •Counterintuitively, the limited/focus-service segment saw a profitability decline in the most recent period, while resort properties — despite being most exposed to cost complexity — saw the strongest profit growth. Grove attributes this to resorts having more revenue levers to pull.
Transcript
We talked about AI. We talked about content creators. In the hotel tech check track, we already talked about like how to cut noise from signal. And now we just talked about guest experience. But now let's get back to the actual business performance metrics and let's talk data. And for that um it's my pleasure. The next session is powered by Duetto. Um if you don't know Duetto, make sure to meet them at their booth. And it is uh all about data and how to leverage data and how to make real data in...
