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. 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 utilized 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 directly related to their occupancy rate. However, crucially, it concerns itself only with money coming in.
On the other hand, GOPPAR factors in expenses and revenue, giving hotel owners their overall profit concerning 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 effectively the business makes money and fills rooms. As a result, it can give an idea of how valuable a hotel is as a business.
For more detailed information about RevPAR and GOPPAR, please also read the articles “What is RevPAR?” and “What is GOPPAR”.
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Revfine.com is a knowledge platform for the hospitality & travel industry. Professionals use our insights, strategies and actionable tips to get inspired, optimise revenue, innovate processes and improve customer experience. You can find all hotel & hospitality tips in the categories Revenue Management, Marketing & Distribution, Hotel Operations, Staffing & Career, Technology and Software.This article is written by:
Hi, I am Martijn Barten, founder of Revfine.com. With 20 years of experience in the hospitality industry, I specialize in optimizing revenue by combining revenue management with marketing strategies. I have successfully developed, implemented, and managed revenue management and marketing strategies for individual properties and multi-property portfolios.
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