Hotel GOP and GOPPAR: Definitions and Decisions

What are GOP and GOPPAR?

Gross operating profit (GOP) is total operating revenue minus the operating expenses included by the property’s accounting definition.

GOPPAR = GOP ÷ available room nights.

Before using either metric, have finance document which departments, payroll, utilities, commissions, management charges, owner costs, depreciation, interest, and tax items are included or excluded.

Calculate an illustrative example

If a hotel records ₹900,000 of GOP for a 30-day month and has 50 sellable rooms each day, available room nights are 1,500. GOPPAR is ₹600.

The example demonstrates arithmetic, not a target. If out-of-order rooms or partial closures are treated differently, document that choice and keep it consistent.

Use GOPPAR with other metrics

Review:

• occupancy, ADR, and RevPAR;
• food, beverage, and other departmental contribution;
• channel and promotion costs;
• payroll and utilities;
• guest satisfaction and service recovery;
• cash flow and fixed obligations outside GOP.

RevPAR can improve while GOPPAR weakens if the incremental revenue carries too much cost. GOPPAR can improve during cost cuts while guest experience deteriorates. The metrics need operating context.

Diagnose changes

Build a bridge from the comparison period: rooms revenue, other revenue, channel cost, payroll, utilities, variable stay cost, and other operating expenses. Separate volume, price, mix, and cost effects. Assign an owner and source report to every material variance.

Avoid common errors

Do not mix available rooms with occupied rooms in the denominator, compare monthly GOPPAR without matching period length, or call GOP net profit. Reconcile the PMS, departmental reports, and general ledger before publishing a number.

Limitations

This guide does not replace the property’s accounting policy or professional advice. Use finance-approved classifications and explain any deviation.