GOPPAR stands for gross operating profit per available room. It is a common key performance indicator in the hotel industry.
Key performance indicators are the driving force behind the growth of any business.
These numbers are very useful to judge your performance at any point in time. So every business should keep an eye on them.
Basically, it is just a matter of analysis and growth. You read the data analyze your performance then try to improve the numbers.
The improved numbers are very motivating also. When you and your employees start getting good results you work even harder.
Hence, today we are discussing one of the most important KPI today.
GOPPAR is in talks these days. People are saying that now it more important KPI then RevPar.
Obviously, RevPar is the most used KPI by hotels but things change. There is a need for a new KPI for a more clear picture. Hence, GOPPAR becomes the new superstar.
So I will try to concise everything that you need to about GOPPAR. We will see what is GOPPAR, why it is important, and how we calculate it.
GOPPAR
The KPI you need
GOPPAR acronym for gross operating profit per available room is a ratio between your operating profit and available rooms.
And that makes GOPPAR very important. It compares your profit, expenses, and available rooms in a time period in single matric. Hence, it gives a bigger picture.
GOPPAR acronym for gross operating profit per available room is a ratio between your operating profit and available rooms.
And that makes GOPPAR very important. It compares your profit, expenses, and available rooms in a time period in single matric. Hence, it gives a bigger picture.
Because this matric is comparing the revenue and expenses it gives you a better idea of your hotel’s financial status. And this can clarify a lot of doubts you have.
Once you know your exact situation, you are in the position of making decisions. As it is said that to cure a disease you need to identify it first. This also works in the same way.
If you see that your stats are dipping down you can do something to stop it.
Here is how Wikipedia defines GOPPAR.
GOPPAR is the abbreviation for gross operating profit per available room, a key performance indicator for the hotel industry.
It gives greater insight in the actual performance of a hotel than the most commonly used RevPAR as it not only considers revenues generated, but also factors in operational costs related with such revenues.
GOPPAR is the total revenue of the hotel less expenses incurred earning that revenue, divided by the available rooms.
GOPPAR does not take into consideration the revenue mix of the hotel, so while it does not allow an accurate evaluation of the room revenue generated it demonstrates the profitability and value of the property as a whole.
The formula to calculate GOPPAR is:
GOPPAR = Gross Operational Profit / Avaialable Rooms where, Gross Operational Profit = Total Revenue - Expenses Expenses can include Rooms expenses, Food and Beverage expenses, Maketing Expenses, IT mentainace etc...
RevPAR is the widely used matric but it has many limitations and hence, it has to be changed.
RevPAR is the revenue per available room. So it compares your room revenue which may help to calculate the profits.
But what about what the incomes from other departments apart from rooms. Rooms may be the primary product of a hotel but a hotel is not limited to rooms only.
RevPAR do not take the revenue from F&B, Conferences, Banqueting, etc under consideration.
Then it also does not address the expenditure of a hotel into consideration as well.
On the other hand, GOPPAR addresses them all. Hence it serves a better purpose.
Hotels can rely upon GOPPAR during the time of their growth. Again the reason is the same i.e. it includes the expenditure too.
When you grow your expenditure increases. You do some hiring, the number of employees increases. Ergo, monthly expense increases.
May you don renovation, or deploy some new marketing campaigns. In every case, expense increases.
So GOPPAR gives you a better idea of where your business is going.
Verily GOPPAR is an important metric for hotels. It can give you a better idea of your hotel so that you can take your business in the direction you want.
I hope I was able to do justice with the topic.
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