GOPPAR
Gross Operating Profit Per Available Room - a profitability metric that measures how much actual profit each available room generates.
Definition
GOPPAR (Gross Operating Profit Per Available Room) is a hotel profitability metric that goes beyond revenue-based measures like RevPAR. It calculates the gross operating profit generated per available room by subtracting operating expenses from total revenue before dividing by available rooms. GOPPAR provides a true picture of bottom-line performance because it accounts for the costs of generating revenue, not just the revenue itself.
Why it matters
While RevPAR tells you how much revenue each room generates, GOPPAR tells you how much profit. A hotel can have excellent RevPAR but poor GOPPAR if costs are too high. GOPPAR helps owners and managers understand whether revenue growth is translating into actual profitability, making it essential for investment decisions, operational benchmarking, and strategic planning.
How to calculate
GOPPAR is calculated by dividing gross operating profit by total available rooms:
GOPPAR = Gross Operating Profit ÷ Available Rooms Where: Gross Operating Profit = Total Revenue - Operating Expenses
Example
If a 100-room hotel has total monthly revenue of €300,000 and operating expenses of €200,000: Gross Operating Profit = €300,000 - €200,000 = €100,000 GOPPAR = €100,000 ÷ (100 × 30) = €33.33 per available room per day
Best practices
- 1Track GOPPAR alongside RevPAR to see the full revenue-to-profit picture
- 2Benchmark GOPPAR against comparable properties in your market
- 3Use GOPPAR to evaluate the impact of cost reduction initiatives
- 4Monitor GOPPAR trends to catch profitability erosion early
- 5Include all revenue streams, not just room revenue, for accurate GOPPAR