Why Profit KPIs Are Evolving
For two decades Revenue Per Available Room (RevPAR) has been the yard‑stick for hotel performance. Yet RevPAR ignores F&B spend, spa revenue, and—most critically—operating costs. In an era where guests book rooms on points but splurge on cocktails, relying on a rooms‑only metric risks steering your strategy blindfolded. Articles from STR and Investopedia now headline RevPAR’s blind spots and promote broader measures like TRevPAR and GOPPAR.
This guide unpacks each formula, weighs pros and cons, and shows how boutique hotels and big‑box resorts alike can blend the metrics for smarter decisions.
The Big Three Formulas—Side-by-Side
KPI | Formula | What It Captures | Quick Example* |
RevPAR | Room Revenue ÷ Available Rooms or ADR × Occupancy | Rooms revenue only | $15,000 ÷ 150 rooms = $100 STR |
TRevPAR | Total Hotel Revenue ÷ Available Rooms | Rooms + F&B, spa, parking, etc. | $24,000 ÷ 150 = $160 revhouse.net |
GOPPAR | Gross Operating Profit ÷ Available Rooms | Profit after variable & fixed costs | $10,200 ÷ 150 = $68 Revfine.com |
*Examples use one day of data for a 150-room hotel.
RevPAR: The Classic Room-Revenue Gauge
What it is: RevPAR tells you how efficiently you fill rooms at what average rate. It’s simple, headline‑friendly, and correlates closely with top‑line growth. The formula—total room revenue divided by available rooms or ADR × occupancy—is plastered across most comp‑set reports (Amadeus Hospitality).
Why hoteliers love it
- Comparability – Chain‑wide or market‑wide, RevPAR levels the playing field.
- Speed – You can calculate it in 30 seconds from your PMS night audit.
- Pricing feedback – A sudden RevPAR dip flags either falling ADR or soft occupancy.
Limitations
- Ignores restaurant, bar, or spa takings—often 20–40 % of revenue in full‑service hotels.
- Says nothing about profit; two hotels with identical RevPAR can have vastly different cost structures.
Optimisation tips
- Upsell within the room category – A $20 premium‑room upsell at check‑in often costs $0 to service.
- Dynamic length‑of‑stay controls – Fill shoulder nights without discounting weekends.
- Rate‑shopper velocity alerts – React before compset price wars erode ADR.
TRevPAR: Capturing Ancillary Gold
What it is: Total Revenue Per Available Room rolls in all on‑property income—rooms, F&B, spa, parking, resort fees—you name it. STR calls RevPAR the “largest component” of TRevPAR but stresses the latter’s bigger picture (STR).
Why it matters now
- Experience economy – Guests book budget rooms but splurge on rooftop cocktails.
- Amenity‑rich resorts – A third of revenue can come from non‑rooms outlets.
- Cross‑department accountability – Shows how well the whole team collaborates to drive spend.
Drawbacks
- Still ignores costs; a pricey buffet may boost TRevPAR while tanking margins.
- Data collection can be messy if outlets run separate POS systems.
Unique insight: Many independents boost TRevPAR by packaging margin‑light experiences (e.g., a guided neighbourhood walk) rather than heavy‑cost F&B buffets.
GOPPAR: The Profit‑First Lens
What it is: Gross Operating Profit Per Available Room subtracts departmental and undistributed expenses before dividing by available rooms. RevFine dubs GOPPAR the only KPI that “pays your bills” (Revfine).
Why finance teams swear by it
- Links commercial decisions directly to the bottom line.
- Comparable across resorts with wildly different F&B footprints.
- Ideal for incentive plans tied to profitability, not just revenue.
Challenges
- Requires accurate departmental cost allocation—trickier for small properties.
- Numbers lag until month‑end close, so not as nimble for day‑to‑day pricing tweaks.
Quick win: Start with an 80/20 approach—allocate obvious costs (F&B COGS, spa payroll) weekly; refine overhead splits quarterly.
When Each Metric Misleads
- High RevPAR, low GOPPAR: Luxury hotel slashes rates to boost occupancy; added housekeeping overtime wipes margin.
- Rising TRevPAR, flat RevPAR: Conference hotel upsells banquets but rooms are under‑priced—profit potential still unrealised.
- Healthy GOPPAR, dropping RevPAR: Asset‑light operator cuts services to maintain profit; guest satisfaction falls, risking long‑term demand.
A balanced scorecard prevents tunnel vision.
Benchmarking by Property Type
Property | RevPAR Focus | TRevPAR Sweet‑Spot | GOPPAR Target |
Limited‑service | Primary KPI | Minimal uplift | 45–50 % of RevPAR |
Full‑service city hotel | Secondary | 1.4× RevPAR typical | 35–40 % of TRevPAR |
Resort | Important but volatile | 1.8–2.2× RevPAR | 30 % of TRevPAR |
Use the table as a north‑star, then fine‑tune for your cost base.
From Metrics to Action—Dashboards & Tech
RoomPriceGenie pumps RevPAR formula outputs, TRevPAR feeds, and GOPPAR estimates into one live tile, flagging variances > 5 % versus budget. Pair it with a BI tool (Looker, Power BI) for departmental drill‑downs.
Key integrations
- PMS for rooms revenue & occupancy.
- POS for outlet spend.
- Accounting/ERP for expense pulls.
Case Studies in KPI Shifts
Urban Boutique
- Problem: Flat RevPAR year‑on‑year.
- Move: Introduced craft‑cocktail class upsell ($45 pp).
- Result: TRevPAR + $18; GOPPAR + $9 (cost < $6 pp).
Beach Resort
- Problem: Strong TRevPAR but shrinking GOPPAR.
- Move: Switched from buffet to à‑la‑carte breakfast, cut F&B cost % by 9 pts.
- Result: GOPPAR margin from 27 % → 35 %, RevPAR unchanged.
5‑Step Plan to Prioritise the Right KPI
- Baseline all three metrics for the last 6 months.
- Map costs by department—start simple.
- Set alert thresholds (e.g., GOPPAR variance > 3 pts).
- Align incentives—front‑desk on RevPAR, outlet managers on TRevPAR, exec team on GOPPAR.
- Review monthly, refine allocations quarterly.
Quick Takeaways
- RevPAR is perfect for day‑to‑day rate checks but ignores ancillaries and cost.
- TRevPAR adds every revenue stream—vital for full‑service hotels.
- GOPPAR is the ultimate profit check; track it at least monthly.
- Use a balanced KPI dashboard to avoid one‑metric tunnel vision.
- Align staff bonuses with the metric they can actually influence.
Conclusion
Choosing between RevPAR, TRevPAR, and GOPPAR isn’t an either/or game—it’s about when and why you use each. RevPAR keeps your pricing honest, TRevPAR rewards creative revenue hunters, and GOPPAR proves the profit story to owners. Start by layering TRevPAR onto your nightly RevPAR report, then baseline GOPPAR at month‑end. Within one quarter you’ll see which lever truly moves your money.
Ready to graduate from a single KPI to a 360° profit view? Fire up the formulas in RoomPriceGenie and watch your dashboard light up.
FAQs
What is the exact RevPAR formula?
RevPAR = Room Revenue ÷ Available Rooms or ADR × Occupancy Rate.
Does TRevPAR include spa revenue?
Yes—any on‑property revenue, including spa, parking, and resort fees.
How often should I calculate GOPPAR?
Monthly at minimum; weekly if your accounting system allows fast cost allocation.
Is ADR or RevPAR more important?
ADR shows rate strength; RevPAR blends rate with occupancy. Track both.
Can small B&Bs use GOPPAR?
Absolutely—just allocate obvious costs (cleaning, breakfast) per room to start.
To learn how RoomPriceGenie can help your property increase your property’s profitability, start your free trial of our automated pricing solution today!
