In the hotel industry, measuring profitability is crucial for making informed business decisions and staying ahead of the competition. GOPPAR (Gross Operating Profit Per Available Room) is a key performance indicator that provides a clear and concise measure of a hotel’s profitability. In this article, we will explore what GOPPAR is, how it’s calculated, and why it’s an important metric for hotels.
What is GOPPAR?
GOPPAR stands for Gross Operating Profit Per Available Room, and it’s a metric used to measure the profitability of a hotel. It is calculated by dividing the gross operating profit of a hotel by the number of available rooms and is expressed as a percentage or currency value. The gross operating profit represents the profit that the hotel generates from its operations after subtracting direct operating expenses such as labor, utilities, and maintenance.
Why is GOPPAR Important for Hotels?
GOPPAR is a useful metric for hotels because it provides a clear and concise measure of their profitability. It allows hotels to compare their performance with industry benchmarks, identify opportunities for improvement, and make informed decisions to increase their profit. For example, if a hotel has a GOPPAR of 60%, it means that it generates a gross operating profit of $60 for every available room. If the hotel increases its GOPPAR to 70%, it means that it has improved its profitability and is generating an additional $10 of profit per available room.
Using GOPPAR in Conjunction with Other Metrics
GOPPAR can be used in conjunction with other metrics, such as RevPAR (Revenue Per Available Room) and ADR (Average Daily Rate), to provide a more comprehensive view of a hotel’s performance. For example, if a hotel has a high GOPPAR but a low RevPAR or ADR, it may indicate that the hotel is not maximizing its revenue potential.
Conclusion:
GOPPAR is a valuable metric for hotels in measuring their profitability and making informed business decisions. By understanding GOPPAR and how it’s calculated, hotels can compare their performance with industry benchmarks, identify opportunities for improvement, and take steps to increase their profit.
Keywords: GOPPAR, hotel industry, profitability, key performance indicator, gross operating profit, available rooms, RevPAR, ADR, informed business decisions
