Tourism sector and hotel business in its different expressions, have lived its particular golden age these last years according to the occupation data recorded in Europe, Asia and America.
However, many experts of tourist accommodations are skeptical about these results. Why many establishments results accounts have been stagnated and not improved? Perhaps we can find the answer checking their GOPPAR.
What is GOPPAR?
GOPPAR refers to gross operating profit per available room. GOPPAR considers revenue and expenses from all areas of the business. That means it’s a good metric for measuring your hotel performance as a whole.
This variable provides us more information than the popular RevPAR (Revenue per available room), an indicator that relates the number of rooms available and the income generated by them during a certain period of time.
Monitoring GOPPAR will allow you to spot trends in the true business performance of your establishment. It can be calculated continuously, on a daily basis, or at the end of a year by dividing your total yearly operating profit by the total number of daily rooms that were available over the course of the year.
How to estimate it?
To estimate your gross operating profit per available room (GOPPAR), subtract your gross expenditure (specifically those ones generated by commercial activity) from your gross revenue, then divide it by the number of available rooms in your hotel.
GOPPAR = Gross revenue – Gross expenditure / Available rooms
How to optimize this indicator?
It is as simple – and as difficult – as increasing the average price per room more than the distribution costs. A good guideline to achieve this is to suppress or reduce the presence of the hotel in those channels that are less profitable.
Another way to optimize this metric, is to observe the data by seasons or periods of the year (it is possible that a channel is very profitable in winter and little in summer, for example). Eliminating possible duplications, promoting direct sales through our own channels (although these are not free, don’t forget) and managing discounts and special promotions more efficiently, are other ways to improve the indicator.
Do you need some help to improve your establishment profits?
If your hotel establishment needs some help to improve its profits, or you are interested in receiving any kind of advice, from Roitels, we can help you.
Do not hesitate in contact us for more information. We can help you in any query you have. Do not waste more time and start boosting your profits!