Revenue
How to calculate what a repeat guest is really worth
2026-07-02 · 7 min read
A worked example with room rate, stay length, commission and acquisition cost.
Start with one stay. Average rate times average nights gives you stay revenue. Subtract commission if the booking came through an intermediary, and subtract the variable cost of servicing the room.
Now multiply by the number of stays a returning guest makes over their relationship with you. Three stays over four years is common for a city hotel and is often enough to change how you think about acquisition.
The interesting part is the difference between the first stay and the rest. The first booking carries acquisition cost. Every subsequent direct booking carries almost none, which is why the second stay is usually worth more to you than the first.
Add on-property spend. Members who feel recognised eat in the restaurant more often, and that margin is frequently better than the room's.
Once you have the number, you can judge any loyalty spend rationally. If a returning guest is worth €900 over four years, spending points equivalent to €40 to secure the next visit is obviously correct.