The hotel industry faces a fundamental reckoning over how it measures performance and allocates investment capital. Sarah Dandashy and Steve Turk, speaking on the Good Morning Hospitality podcast from Skift, reveal that traditional metrics guiding hotel strategy may no longer align with market reality.

For decades, hoteliers relied on RevPAR (Revenue Per Available Room) as the north star metric. This measurement drove decisions about pricing, occupancy targets, and capital deployment across chains from Marriott International to Hilton to IHG. Yet RevPAR's dominance obscures what actually matters: profit margins, guest lifetime value, and sustainable growth.

The conversation highlights where capital flows in today's market. Major hotel operators increasingly chase premium positioning and corporate partnerships rather than competing on volume. Luxury chains like Four Seasons and The Peninsula attract disproportionate development funding because they generate superior returns per room, not more rooms. Meanwhile, budget operators like Red Roof and La Quinta compete fiercely on efficiency metrics that RevPAR never captured.

Information asymmetry reshapes guest behavior too. Online travel agencies like Expedia and Booking.com control which properties appear first, what ratings display, and which reviews travelers see. Hotels surrendering pricing power to these platforms accept lower margins for guaranteed visibility. Independent properties struggle to compete without massive OTA commissions eating into already thin profits.

The shift reflects broader travel trends. Post-pandemic guests prioritize flexibility, authenticity, and specific amenities over brand loyalty. They research obsessively across TripAdvisor, Google Reviews, and social media before booking. Hotels investing in direct booking channels and reputation management capture better margins than those dependent on traditional distribution.

For travelers planning bookings, this structural shift matters. Hotels optimizing for RevPAR often overbook, charge surprise fees, and deprioritize service quality. Properties