What it means
A hotel can sell more rooms at a discount and still make less operating profit after payroll, utilities and other costs. GOPPAR helps managers see how much gross operating profit the property earned for each room it could have sold, which adds a cost lens to room revenue measures.
HotStats describes GOPPAR as gross operating profit divided by available rooms and contrasts profit measures with room revenue measures, but its hotel comparisons depend on consistent accounting definitions, property type and period. Start with gross operating profit for the property, using an explicitly stated accounting basis, and do not confuse it with gross margin from another industry.
Determine available room-nights over the same period, since a 100-room hotel open for 30 days ordinarily has 3,000 potential room-nights before documented exclusions. Check whether out-of-order rooms are excluded or included under the reporting convention, because changing the denominator can move the metric without changing profit.
Suppose the hotel reports $240,000 in gross operating profit and 3,000 available room-nights; GOPPAR is then $80 per available room-night. The measure covers operating profit from the hotel, not just guestrooms, so food, events and other departments may contribute.
Costs matter too: a busy restaurant may lift revenue but yield little incremental profit if its staffing and waste rise sharply. RevPAR focuses on room revenue per available room, so a rising RevPAR alongside falling GOPPAR suggests further investigation of operating costs or other departments.
TRevPAR uses total revenue per available room, and comparing it with GOPPAR helps assess how much revenue is converted into operating profit, but the measures still need matched definitions. Occupancy and average daily rate explain parts of room revenue, not the complete profit outcome, since high occupancy may require overtime or higher variable costs.
Compare like periods for seasonality, because a peak holiday week and a quiet midweek month offer different operating conditions, and separate price, volume and cost movements. Inflation, wage changes or utility prices may make nominal figures rise or fall for reasons unrelated to service quality, and exchange-rate shifts can distort cross-border portfolios, so keep the same currency or state the conversion method.
Review segment mix too, since corporate guests, groups and leisure guests may have different rates and costs to serve, and disclose the limitation when a property has had a major renovation or temporary closure. Use the underlying profit report to understand payroll, departmental expenses and undistributed operating expenses, and do not assume all costs are included, because financing, taxes, depreciation and owner-specific charges may sit below the reported gross operating profit line.
The number is a property-level operational signal, not cash available to owners, so debt payments and capital spending still matter. A lower GOPPAR can reflect a deliberate service investment and a higher one can hide deferred maintenance, so pair the figure with guest and quality measures, and when a function is outsourced check whether costs merely moved between lines.
In practice
Real-world examples.
Example
A 100-room hotel open 30 days earns $240,000 in gross operating profit; $240,000 / 3,000 gives GOPPAR of $80 per available room-night. The finance team states the profit definition and the treatment of out-of-order rooms on the dashboard. It also labels the unit as per available room-night.
Example
Room revenue rises, but higher overtime and utilities reduce GOPPAR. The general manager reviews payroll and utility lines before accepting the revenue growth as a success. The owner asks whether the cost increase was temporary.
Example
A portfolio calculates its aggregate using total operating profit divided by total available room-nights. Targets for each hotel are set against comparable assets and an agreed budget, because a resort and an airport hotel can have very different economics. The source period and availability data are checked before the figure is published.
Formula
Calculation
GOPPAR = gross operating profit for the period / available room-nights for the same period. State the profit definition, currency and treatment of unavailable rooms. For a 100-room hotel open for 30 days with $240,000 of gross operating profit, GOPPAR = $240,000 / (100 x 30) = $240,000 / 3,000 = $80.
Compare it with RevPAR. If room revenue for the same month is $390,000, RevPAR = $390,000 / 3,000 = $130. Suppose a deep promotion lifts room revenue by $15,000 but extra housekeeping shifts and lower food margins add $30,000 of cost. Gross operating profit falls by $15,000 to $225,000, so GOPPAR becomes $225,000 / 3,000 = $75 even though RevPAR rose to ($390,000 + $15,000) / 3,000 = $135.
For a portfolio, divide combined profit by combined available room-nights. A second hotel with $150,000 of profit over 2,000 available room-nights has GOPPAR of $75, and the two together have ($240,000 + $150,000) / (3,000 + 2,000) = $390,000 / 5,000 = $78, not the simple average of $77.50.Case study
Seen in the real world.
In this fictional case, Harborlight Hotel increased occupancy with a deep promotion. Its room revenue per available room rose slightly, but added housekeeping shifts and lower food margins reduced GOPPAR. Managers reviewed the promotion alongside service scores before setting new rates. All figures and events are invented.
Before the next promotion, the revenue manager built a simple comparison of expected room revenue, expected extra payroll and expected food and utility costs for each discount level. The offer that filled the most rooms was not the offer that produced the highest profit per available room-night, and the team chose a smaller discount with a shorter booking window. The finance director also asked that every monthly report show RevPAR, TRevPAR and GOPPAR side by side, with the currency and the per-available-room-night unit stated. If any input was later revised, the metric was restated so that earlier months remained comparable.
Watch out
Common mistakes.
- Using sold room-nights rather than available room-nights in the denominator.
- Calling GOPPAR net profit or cash flow.
- Comparing properties with different cost definitions without disclosure.
Questions
People also ask.
How is GOPPAR different from RevPAR?
RevPAR uses room revenue; GOPPAR uses gross operating profit from the property.
Does a higher value always mean better management?
Not by itself. Check service, deferred costs, comparability and investment.
What period should be used?
Any defined period can work if profit and available room-nights cover the same dates.
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