Revenue per available room, or RevPAR, and gross operating profit per available room, or GOPPAR, are two of the most vital KPIs available to hotel managers and both form an important part of any effective revenue management strategy. Both metrics concern themselves with occupancy rates, but they detail very different things, as one is centered around money being brought in, while the other is based on overall profit.
How Do You Calculate RevPAR and GOPPAR?
The revenue management metrics RevPAR and GOPPAR both have fairly simple formulas, which are as follows:
RevPAR = Rooms Revenue / Rooms Available OR RevPAR = Average Daily Rate x Occupancy Rate
GOPPAR = Gross Operating Profit / Available Rooms
Gross operating profit can be calculated by subtracting expenses away from revenue generated.
RevPAR vs GOPPAR
The RevPAR KPI is utilised by those operating in hotel management to tell them how much revenue they are generating per available room in their hotel. Its primary value is telling hotel owners their revenue from selling hotel rooms, in direct relation to their occupancy rate. However, crucially, it concerns itself only with money coming in.
On the other hand, GOPPAR factors in expenses as well as revenue, giving hotel owners their overall profit in relation to occupancy rate. Unlike RevPAR, it is not concerned only with revenue generated by selling rooms, but includes all revenue. This gives a rounded view of overall performance, including how effective the business is at making money and filling rooms. As a result, it can give an idea of how valuable a hotel is as a business.