GOPPAR (GOPPAR)
In hotel revenue management, GOPPAR (gross operating profit per available room) is gross operating profit divided by the number of rooms available, whether or not they sold.
It is the metric owners and lenders actually care about, and the one that reveals when a good RevPAR year was not a good year.
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What is GOPPAR?
Gross operating profit divided by rooms available. Same denominator as RevPAR and TRevPAR, which is what makes the three directly comparable and lets you see where the money went.
Gross operating profit is total revenue minus operating expenses, before rent, interest, tax, depreciation and amortisation. It is what the hotel earned from running as a hotel, stripped of how it was financed and who owns the building.
That definition is the whole reason the metric exists. RevPAR measures the top line and says nothing about what it cost to produce. Two properties with identical RevPAR can have materially different GOPPAR, and the gap between them is distribution cost, labour and operating expense.
The relationship is worth holding in your head as a chain. RevPAR is rooms revenue per available room. TRevPAR adds every other department. GOPPAR subtracts the cost of producing all of it. Each step moves closer to what an owner takes home and further from what is easy to benchmark.
That trade-off is real. GOPPAR is the most meaningful of the three and the hardest to compare externally, because cost structures vary enormously between properties.
Resources: RevPAR · TRevPAR · Distribution mix
How GOPPAR works in practice
The useful exercise is comparing two periods or two properties that look identical on RevPAR.
Worked example. Two 46-room inns both post $127 RevPAR for October. The first sells 62 percent of its rooms through OTAs at an average 17 percent commission. The second sells 28 percent that way. On roughly $175,000 of room revenue, the first pays about $18,400 in commission and the second about $8,300. Same RevPAR, a $10,100 difference in gross operating profit before a single other cost is counted.
That is the case for the metric in one paragraph. The first property would report an identical headline and take home meaningfully less, and nothing in RevPAR would ever show it.
The everyday use is checking whether a revenue gain survived contact with its own cost. A month where RevPAR rose 9 percent and GOPPAR rose 2 percent means the growth was bought: more OTA volume, more agency business, more staffing to service more rooms. A month where RevPAR rose 4 percent and GOPPAR rose 11 percent means the growth came from rate, which carries almost no incremental cost.
Read annually or quarterly rather than monthly for most independents. Operating costs land unevenly across a year, and a monthly GOPPAR swings on maintenance timing in a way that tells you nothing about trading.
Resources: Net ADR yield · Dynamic pricing
Why GOPPAR matters for independent hotels
Because for an owner-operator the top line is not the point. You are not running the property to maximise RevPAR, you are running it to take money out of it, and those two goals separate more often than anyone expects.
The separation usually happens through distribution. A property that fills by leaning on OTAs can show years of RevPAR growth and flat profit, and because the industry talks in RevPAR the problem is invisible in every conversation and every benchmark.
GOPPAR is also the number a buyer or a lender will build their valuation from. Hotels trade on profit, not revenue, and an owner who can show a GOPPAR series is in a materially stronger position than one who can show a RevPAR series and a shrug.
The practical caveat is that calculating it properly requires a clean profit and loss with operating expenses separated from financing costs, and plenty of small properties do not keep their books that way. That is worth fixing for its own sake.
Resources: Revenue management for independent hotels
How to use GOPPAR at your property
- Agree what counts as an operating expense with whoever does your books, and write it down. Consistency matters more than which convention you pick.
- Use the same denominator as RevPAR. Rooms available, so the three metrics sit on one line and the gaps between them are readable.
- Read it quarterly or annually. Monthly GOPPAR is dominated by when you happened to pay for things.
- Check it against RevPAR direction every time. RevPAR up and GOPPAR flat is the pattern that matters, and it usually means distribution.
- Split the cost side at least once a year into distribution, labour and other. Most independents find the first one bigger than they assumed.
- Do not benchmark it externally without care. Cost structures vary so much that comparisons across properties are mostly noise.
What GOPPAR will not tell you
It sits above the capital structure, deliberately. Rent, interest, tax and depreciation are all excluded, so a property with strong GOPPAR and heavy debt can still be losing money at the bottom. GOPPAR measures the business, not the investment.
It cannot be benchmarked reliably. There is no equivalent of RGI for profit, because one property's operating expenses include a restaurant and a spa while another's include a vending machine. Averaging those produces a number about nothing.
And it lags badly. Revenue data is available daily, while a reliable profit figure usually arrives weeks after month end. GOPPAR tells you what happened, never what is happening, which is why it informs strategy and never a rate decision on a live date.
How ampliphi approaches profitability
Ampliphi prices rooms. The everyday rate suggestion is demand-based, built on booking pace and occupancy, covering the base rate and the differential between room types. It does not model your operating costs, your labour or your commission rates, and it does not calculate GOPPAR.
What it affects is the input side. Rate carries no incremental cost, so revenue won on rate rather than volume flows through to gross operating profit far more completely. A property that lifts ADR on dates that were filling anyway has improved GOPPAR without adding a single room to service.
The rest of the profit picture, and particularly the distribution mix that drives so much of it, stays yours to manage. You approve every rate before it publishes, and ampliphi runs on top of the PMS you already use.
Key takeaways: GOPPAR
- Gross operating profit divided by rooms available. Same denominator as RevPAR, so the three metrics are directly comparable.
- Excludes rent, interest, tax and depreciation. It measures the business, not the investment.
- Two properties with identical RevPAR can have very different GOPPAR. The gap is usually distribution cost.
- RevPAR up with GOPPAR flat is the pattern worth catching, and the industry's RevPAR habit hides it.
- Read quarterly or annually. Monthly figures swing on when costs happened to land.
- It is the number a buyer or lender will value you on.
Frequently asked questions about GOPPAR
What is the difference between GOPPAR and RevPAR?
RevPAR counts room revenue per available room. GOPPAR counts gross operating profit per available room, so it includes every other department's revenue and subtracts the cost of producing all of it.
The practical difference is what each one can hide. RevPAR cannot see that you bought your occupancy through 18 percent commission channels, or that servicing the extra rooms added shifts to the housekeeping rota. GOPPAR sees both.
Use RevPAR for pricing decisions and competitive benchmarking, where it is the industry's common language. Use GOPPAR for the annual question of whether the business is actually getting better.
Why did my GOPPAR fall when my RevPAR rose?
Almost always because the revenue growth was bought rather than earned.
The usual mechanism is distribution mix. If the extra business arrived through OTAs or agencies at a commission you do not pay on direct bookings, a substantial slice of the new revenue left before it reached profit. Growing OTA share by ten points on a property doing $175,000 a month can cost five figures a year without changing a single published rate.
The second mechanism is servicing cost. Higher occupancy means more rooms cleaned, more amenities, more laundry and often more hours. If the occupancy gain came at a lower rate, the extra revenue may not cover the extra cost at all.
Split the revenue growth by channel before looking anywhere else. That usually answers it.
How do I calculate GOPPAR for a small hotel?
Total revenue for the period, minus operating expenses, divided by rooms available in that period.
The difficulty is not the arithmetic. It is agreeing what counts as an operating expense, and plenty of small properties keep books where owner drawings, mortgage payments and genuine operating costs are mixed together. GOPPAR requires them separated, with rent, interest, tax and depreciation excluded.
Have that conversation with your accountant once, write down the convention, and apply it consistently. A GOPPAR series calculated two different ways across three years is worse than none, because it will show trends that are accounting artefacts.
Should independents track GOPPAR or just RevPAR?
RevPAR weekly or monthly for operational decisions, GOPPAR quarterly or annually for the strategic ones.
RevPAR is what you can act on. It is available immediately, it decomposes into rate and occupancy, and it tells you whether a pricing decision worked. GOPPAR arrives too late and moves too slowly to inform anything on a live date.
But an independent tracking only RevPAR can spend three years growing revenue and standing still on profit, and never know why. Once a year is enough to catch that, and once a year is achievable even for a property without a finance function.
Is there a competitive benchmark for GOPPAR?
Not a reliable one, and the reason is structural. The competitive indices work because occupancy, ADR and RevPAR are defined consistently enough across properties to aggregate honestly. Operating expenses are not.
One property's costs include a restaurant, a spa and forty staff. Another's include a part-time housekeeper and a laundry contract. Some owners take a salary through operating expenses, some do not. Averaging those produces a figure nobody should act on.
Some benchmarking providers publish profitability studies by market and property type, and they are worth reading for direction. For a genuine comparison, benchmark GOPPAR against your own history and your own budget, and use RGI on the rooms business where the comparison is valid.
Related terms
RevPAR
Room revenue divided by rooms available. GOPPAR's revenue-side counterpart, and the number the whole industry benchmarks on despite being silent about cost.
TRevPAR
Total revenue from every department divided by rooms available. The middle step between RevPAR and GOPPAR, adding the other revenue lines before any cost is subtracted.
Net ADR yield
ADR after channel commission and distribution costs. The room-level version of the same idea, and usually the quickest way to see where GOPPAR is leaking.
Distribution mix
The share of room nights coming from each channel. The single largest controllable driver of the gap between RevPAR and GOPPAR at most independent properties.
Occupancy rate
The percentage of available rooms sold. The only core metric with a direct cost attached, which is why occupancy-led growth flows through to GOPPAR far less completely than rate-led growth.