From RevPAR to GOPPAR: Key Performance Indicators for Hotels

Today, hotel administrators must evaluate numerous performance indicators to guarantee success. The focus is often on RevPAR, or “Revenue Per Available Room,” because it shows room profitability. Nevertheless, GOPPAR (Gross Operating Profit Per Available Room) is another vital metric.

GOPPAR illustrates a hotel’s overall profitability and its ability to effectively manage both inflows and outflows of funds. This makes it an essential tool for hotel managers.

Understanding GOPPAR

GOPPAR accounts for both revenue and costs, unlike RevPAR and TrevPAR (Total Revenue Per Available Room). This provides a more complete picture of a hotel’s financial health. RevPAR shows how well a hotel generates room revenue. In contrast, GOPPAR assesses how well the hotel manages both revenue and expenses.

RevPAR can naturally increase with a good revenue management strategy. However, true profitability hinges on effectively managing costs. Costs might include rising supplier prices, expenses for renovations, or increased rent. By focusing on both revenue and costs, GOPPAR helps hotel managers make more informed decisions about their operations.

GOPPAR in Practice

Hotels offer more than lodging. They have restaurants, bars, spas, and meeting spaces. To see overall profitability clearly, include the revenue and costs of these services.

To calculate GOPPAR, first determine your operating profit. This includes revenue from rooms and other services minus the costs of these operations. Then, divide this figure by the number of available rooms. Here’s a simplified example:

Hotel Details:

• Number of rooms: 60
• Marketing period: 365 days
• Number of rooms available yearly: 21,900

Revenue:

• Accommodation (average sale price €80-€90/night, 80% occupancy): €1,500,000
• Restaurant services (breakfast, room service, bar): €800,000
• Other departments (MICE, spa, fitness): €200,000
• Total revenue: €2,500,000

Costs:

• Accommodation (20% of revenue): €300,000
• Restaurant services (40% of revenue): €320,000
• Other departments: €60,000
• Total costs: €680,000

Gross Operating Profit (GOP):

• €1,820,000

GOPPAR:

• €83 (GOP divided by the number of available rooms)

A great practical example that underscores the necessity of monitoring not just RevPAR, but the overall operational burden affecting GOPPAR, is a recent case study of a hotel that increased its revenue by 10% in just 9 months. When this hotel’s occupancy surpassed 90%, the sheer volume of reservations revealed hidden risks to profitability. The property faced an explosive increase in payment gateway commissions, alongside heavy operational pressures such as housekeeping staff rescheduling, linen shortages, and even water damage. This operational strain clearly demonstrates why tracking both revenue and expenses is critical. To optimize overall profitability, the revenue manager shifted strategy: moving away from the 15-year pursuit of direct bookings and high occupancy, to focus primarily on growing the Average Daily Rate (ADR). At the same time, a deep analysis of online reviews was launched to prepare for the low season, confirming in practice the close link between pricing strategies, guest feedback, and actual operational profitability. I will be sharing the entire step-by-step process of what happened with this hotel, including exactly what we did and what we decided not to do, in my video podcast series. Listen on Spotify or watch on Youtube by searching for Behind Every Booking. This case study serie will be launched in April 2026.

Significance of Regular Profitability Assessment

Profitability assessments are done regularly to find strengths and weaknesses. If your restaurant is making less profit, the cause should be checked. Is it due to investment in kitchen facilities? Or is it a drop in the number of guests? Understanding the root causes of changes in profitability helps you make better decisions.

For your rooms, you might find that revenue has increased relative to costs. This could be the result of a good pricing strategy and effective management of rooms sold through OTAs (Online Travel Agencies). By regularly evaluating GOPPAR, you can track these changes and adjust your strategies accordingly.

Analyzing Your Online Reputation

Your online reputation can also impact your GOPPAR. Positive reviews can lead to higher prices and improved performance indicators. Regularly check reviews to see if investments, like hotel renovations, are positively impacting your reputation. A good reputation often translates to better occupancy rates and higher prices, both of which contribute to an improved GOPPAR.

Analyzing reviews can also provide insights that numbers alone cannot. For example, if occupancy rates drop, reviews might reveal the reasons. Bad quality linen or lack of a hot breakfast buffet could be to blame. These insights help you address issues affecting profitability.

Other Performance Metrics

Several other metrics can help measure your hotel’s performance:

ADR (Average Daily Rate) 

This metric measures the average revenue earned per occupied room and helps understand pricing effectiveness.

RevPOR (Revenue Per Occupied Room)

This metric provides insights into the revenue generated per occupied room, considering all services used by guests.

Analyze these metrics alongside GOPPAR to maximize your hotel’s efficiency. Depending on your hotel’s size, available rooms, services offered, and operational costs, take the time to review this data thoroughly. Each metric provides valuable information that can help you improve different aspects of your hotel’s operations.

Improving GOPPAR Through Feedback

Client reviews can provide insights that numbers alone cannot. If occupancy rates drop, for instance, it could be because of bad linens or the absence of a hot breakfast buffet, according to studies. The best way to discover development opportunities and implement changes that boost visitor satisfaction and profitability is to regularly monitor and evaluate customer feedback.

All performance indicators are interconnected. Analyzing them properly will help you better understand your competitive advantages and identify areas for improvement. By focusing on GOPPAR and other key performance measures, you can ensure that your hotel remains profitable and competitive in the constantly shifting hospitality market.

Although RevPAR is a great indicator, GOPPAR offers a more all-around assessment of the profitability of your property. Regular evaluation of your GOPPAR, online reputation analysis, and client comments can help you make wise decisions enhancing the performance and profitability of your hotel.

The Bottom Line: Stop Chasing Vanity Metrics

At the end of the day, high RevPAR might make your occupancy reports look impressive on paper, but GOPPAR is what actually puts profit in the bank.

If your room revenue is going up while your net bank balance stays flat, you don’t have a volume problem—you have a margin problem. Running a hotel at 90%+ occupancy without tracking payment gateway fees, housekeeping overtime, linen turnover, and channel acquisition costs is the fastest way to run a busy, exhausted, and underprofitable property.

Quick Audit: Do You Know Your True Margin?

Before you set your pricing for next month, ask yourself:

1. Do we know our exact operational cost per sold room across every single booking channel?
2. Are our high-occupancy dates actually yielding higher gross operating profit, or are hidden costs eating up the extra ADR?

If you answered “I’m not sure” or “No,” you are leaving pure margin on the table every single night.

Ready to Turn High Occupancy into True Profitability?

You don’t have to navigate channel mix, cost allocation, and pricing architecture in isolation. If you’re ready to stop chasing vanity metrics and start building a high-GOPPAR strategy tailored to your property, here is how we can work together:

• 🎯 1:1 Consulting Call: Got a specific rate tier, channel mix, or cost-structure bottleneck? We’ll jump on a targeted 1:1 call, tear down the problem using your real numbers, and build an immediate action plan.
• 🛠 Over-The-Shoulder Revenue Support: Want hands-on support week by week? We work side-by-side on your Demand Calendar and P&L data so you learn exact yielding and cost-control strategies in real time.
• 🚀 VIP Strategy Day: A dedicated deep-dive audit where we overhaul your property’s market segmentation, distribution mix, and pricing architecture to build a custom roadmap for maximum net profit.

📩 Ready to fix your numbers?

[Click here to reach out via the Contact Form] or send me a direct message today. Let’s look at your property’s data and build a revenue strategy that works for your bottom line!

Toast to your success,

Radka