GOPPAR

Gross operating profit per available room (GOPPAR), is a measure of the profit made by hotels. It relates profit to capacity. Unlike revpar it takes into account that fact that hotels make much of their profit from activities other than providing rooms - food and beverage sales are particularly important.

The biggest objection to GOPPAR is that meaningful comparisons of GOPPAR between different hotels is even more difficult than comparisons of revpar. The proportion of profits from food and beverage sales is much higher for more upmarket hotels. It will also vary with location and the facilities offered by a particular location. A large five star hotel in a rural location that appeals to tourists, is far better able to make food and beverage sales than a budget hotel in a city centre well supplied with bars and restaurants.

GOPPAR is also measured at a level that is subject to significant operational gearing, so small changes in occupancy or rates will only lead to proportionate changes in revpar, but much larger changes in GOPPAR.

For these reasons GOPPAR is usually more useful for internal use than for investors. It is not, in any case, sufficiently widely disclosed to be of much use in inter-company comparisons. If it is disclosed, it may be useful for year-on-year comparisons.

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