Question 1

What's the difference between GOPPAR and RevPAR?

Accepted Answer

RevPAR (Revenue Per Available Room) only considers revenue from rooms. GOPPAR (Gross Operating Profit Per Available Room) is more comprehensive; it includes all revenue sources (rooms, F&B, spa, etc.) and subtracts the operating expenses required to generate that revenue. GOPPAR is a stronger indicator of overall profitability.

Question 2

What is included in 'Operating Expenses'?

Accepted Answer

Operating expenses typically include all costs associated with running the hotel's departments. This means departmental costs for Rooms (laundry, supplies), Food & Beverage (cost of goods sold), and other operated departments, as well as undistributed expenses like administrative, marketing, maintenance, and utility costs.

Question 3

Why is GOPPAR a better measure of performance than profit margin?

Accepted Answer

Profit margin shows profitability as a percentage of revenue, which is useful. However, GOPPAR shows the actual profit generated for each available room, making it a powerful metric for comparing performance between hotels of different sizes or with different revenue mixes. A hotel could have a high profit margin but a low GOPPAR if it has low occupancy.

Question 4

What costs are excluded from the GOPPAR calculation?

Accepted Answer

GOPPAR focuses on operational efficiency. Therefore, it excludes non-operating expenses like rent, property taxes, insurance, depreciation, amortization, and interest. These are often referred to as 'fixed charges' and are considered below the GOP (Gross Operating Profit) line on a hotel's profit and loss statement.

Question 5

How can I improve my GOPPAR?

Accepted Answer

Improving GOPPAR involves a two-pronged approach: 1) Increase total revenue by driving room sales, upselling, and promoting ancillary services (F&B, spa, events). 2) Decrease operating expenses through better cost control, energy efficiency, optimized staffing, and negotiating with suppliers.

GOPPAR Calculator

Revenue

Expenses & Rooms

Results

Understanding GOPPAR

Frequently Asked Questions

Need Help Optimizing Your Hospitality Business?