RevPAR and GOPPAR both divide by rooms available, so they look like siblings. They answer different questions. RevPAR tells you how well the hotel sold its rooms. GOPPAR tells you how much profit the whole hotel made for each room it had to sell. A month can show RevPAR up and GOPPAR down, and knowing why is a large part of a monthly review.
The formulas
- RevPAR = rooms revenue ÷ rooms available, which also equals occupancy × ADR.
- GOPPAR = gross operating profit ÷ rooms available.
- TRevPAR = total operating revenue ÷ rooms available, the bridge between the two.
Use the same rooms available figure in all three: rooms in the inventory × days in the period, less any rooms your policy removes (for example, rooms out of order for a renovation). Write the policy down and apply it every month.
What each one measures
| RevPAR | GOPPAR | |
|---|---|---|
| Numerator | Rooms revenue | Gross operating profit (all departments, after undistributed expenses) |
| Driven by | Occupancy and rate | Revenue in every department, and the cost of earning it |
| Main users | Revenue management, sales, brand comparisons | Owners, asset managers, the GM and finance |
| Blind spot | Costs, commissions, F&B and other departments | Fixed charges below GOP, such as rent, insurance and property taxes |
RevPAR is quick to calculate, available daily and easy to compare with a competitive set. GOPPAR takes a closed month and a P&L laid out consistently, such as a USALI-style layout, but it shows whether the revenue was worth earning.
A worked example: RevPAR up, GOPPAR down
Fictional Sample Inn has 40 rooms. In a 30-day month that is 1,200 rooms available.
| Sample Inn (fictional) | Last year | This year |
|---|---|---|
| Rooms sold | 870 | 900 |
| Occupancy | 72.5% | 75.0% |
| ADR | $160.00 | $162.40 |
| Rooms revenue | $139,200 | $146,160 |
| RevPAR | $116.00 | $121.80 |
| Total revenue | $175,000 | $184,000 |
| TRevPAR | $145.83 | $153.33 |
| GOP | $61,000 | $59,800 |
| GOP margin | 34.9% | 32.5% |
| GOPPAR | $50.83 | $49.83 |
RevPAR is up 5.0%. GOPPAR is down 2.0%. Total revenue rose $9,000, but GOP fell $1,200. In this fictional month, the extra rooms came largely through online travel agencies, so commissions rose, and housekeeping overtime grew with occupancy. The rooms report looks like a good month; the P&L does not.
Why they diverge
- Occupancy-led growth: each extra occupied room brings housekeeping, laundry, supplies and often commission with it. Rate-led growth brings far less.
- Channel mix: rooms revenue is usually reported before commissions, so a shift toward third-party channels raises RevPAR without raising profit to match. Net ADR, after commission, shows it.
- Other departments: food and beverage, spa or parking can lose money in a month when rooms do well.
- Undistributed costs: utilities, repairs and sales and marketing sit in GOP but not in RevPAR.
How to use both in a monthly review
- Check that occupancy × ADR equals RevPAR. If it does not, the counts are inconsistent.
- Compare RevPAR and GOPPAR change against last year and budget, side by side.
- If they move apart, look at flow-through: the change in GOP divided by the change in revenue.
- Split the revenue change into rate and occupancy before judging it.
- Report both to ownership, with one sentence on why they moved differently.
Common mistakes
- Dividing GOPPAR by rooms sold instead of rooms available. That is a different KPI and is not comparable.
- Comparing GOPPAR between hotels whose P&Ls classify costs differently, such as management fees above or below GOP.
- Averaging monthly RevPAR or GOPPAR to get a year-to-date figure. Divide year-to-date totals by year-to-date rooms available instead.