Calculate revenue potential

What is Gross Operating Profit per Available Room (GOPPAR)?

GOPPAR is the only one of these six numbers that looks at both sides of the ledger.

ADR, RevPAR and occupancy all measure money coming in. GOPPAR measures what survived the trip. It takes your whole hotel's profit after operating costs and spreads it across every room you own.

Rent, loan interest, tax and depreciation stay outside it, because they say more about how the hotel was financed than about how it is being run.

GOPPAR formula

Gross operating profit ÷ Available room nights

Your 40-room hotel took $180,000 across every department last month and spent $126,000 running the place.

$180,000 minus $126,000 = $54,000 gross operating profit

$54,000 ÷ 1,200 = $45

Each room contributed $45 a night to the business.

How to calculate your property's monthly and yearly GOPPAR

Pull your total revenue and your total operating costs for the period from the same report, so nothing is counted twice or missed. Payroll, housekeeping, utilities, marketing, commission, maintenance and supplies all belong in the cost side.

Monthly GOPPAR is where you will spot a cost problem while it is still small. Yearly GOPPAR is what an owner, a lender or a buyer will want, because it is the closest thing to a like-for-like comparison between two hotels.

Track GOPPAR on the same chart as RevPAR. When the two lines start to separate, something in your cost base has changed, and you will see it months before it reaches your annual accounts.

Why is GOPPAR important?

GOPPAR is the number your owner cares about, because it is the only one that survives contact with the P&L.

RevPAR is up but GOPPAR is flat. Every dollar of new revenue was eaten on the way in. Look at commission first, then at labour hours per occupied room. You are working harder for the same profit, and that gap only widens.

GOPPAR is up while RevPAR holds steady. You fixed something structural. Lower commission, better staffing, fewer giveaways. This is the most durable win available to a hotel, because it holds even when demand softens.

Both are falling. Do not start with pricing. Start with your cost per occupied room. If that has climbed, no rate strategy will outrun it.

Two hotels can post an identical RevPAR and hand their owners very different returns. GOPPAR is the number that shows which one is actually a good business.

4 strategies to improve your property's GOPPAR

Revenue is only half of this metric. Three of these four work on the other half.

1. Shift the mix toward direct

Every booking that arrives through your own website instead of an OTA keeps the commission in the building. Same guest, same rate, more profit. A small shift in mix moves GOPPAR more than a rate rise, and no guest has to pay a cent extra.

2. Learn your cost per occupied room

Most hoteliers can name their ADR and not this one. Housekeeping, laundry, amenities and utilities, divided by rooms sold. Once you can see the figure, you can move it. Until then you are managing revenue and hoping about cost.

3. Cut the small leaks that repeat every night

A $4 amenity nobody asked for, across 780 sold rooms, is $3,120 a month. Nobody notices it in one room. Everybody notices it in the year-end accounts.

4. Staff to the forecast, not to the average

Rostering the same team for a 40% Tuesday and a 95% Saturday costs you twice. Build the roster from your arrivals forecast and the saving lands every single week.