There has been a ripple of interest lately in a new metric for the hotel industry, GOPPAR. (If it seems strange that an obscure ratio can spark an industry-wide debate, then you should start hanging out at the accounting department water cooler more often.) Proponents of the measure, which computes gross operating profit per available room, argue that it is a more effective benchmark for a hotel’s overall fiscal health than RevPAR is, because it incorporates all operating costs. After all, it is profits that matter most at the end of the day- not necessarily revenues- and having a day-to-day yardstick with which to measure those profits in terms of available rooms is both useful and realistic. The advantages of GOPPAR in this area are obvious; a hotel with both high ADR and RevPAR could, conceivably, still fail to turn a profit, but a hotel with strong GOPPAR will, by definition, be profitable.
For lack of a more original assessment, we like GOPPAR. It’s a great benchmark for overall operational soundness, and we feel that it may well be the metric of the future.
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