When it comes to measuring the success of a hotel, RevPAR (Revenue Per Available Room) often takes center stage.
NB: This is an article from HotStats
Subscribe to our weekly newsletter and stay up to date
It’s a simple metric: total room revenue divided by the number of available rooms. But here’s the catch – focusing solely on RevPAR is like judging a restaurant’s success by its appetizers alone. There’s more to the story, and this is where metrics like TRevPAR (Total Revenue Per Available Room) and GOPPAR (Gross Operating Profit Per Available Room) step in to paint a fuller picture.
Let’s break it down with some theoretical scenarios.
Scenario 1: The “Full House, Empty Wallet” Dilemma
RevPAR Says: “You’re Winning!”
Imagine a boutique hotel with 100 rooms, all fully booked for a weekend. RevPAR is through the roof at $200. Sounds great, right?
TRevPAR Tells a Different Story:
Now, let’s consider TRevPAR. Guests booked rooms but didn’t spend much on dining, spa treatments, or other amenities. Total revenue, including room, F&B, and other services—is $25,000. That’s a TRevPAR of $250.
GOPPAR Sets the Record Straight:
After accounting for operating costs (staff wages, utilities, supplies), the hotel’s gross profit is just $5,000. GOPPAR stands at $50—a sharp contrast to the $200 RevPAR.
The takeaway? High occupancy doesn’t always mean high profits. Without keeping an eye on ancillary revenue streams and operating efficiency, you’re leaving money on the table.
Scenario 2: The “Luxury Leisure” Upsell
RevPAR Says: “Nice Job!”
A resort’s RevPAR is $300, thanks to premium room rates during peak season.
TRevPAR Says: “Keep It Up!”
Guests are indulging in everything. The resort offers—fancy dinners, spa treatments, golf packages, and private cabanas. Total revenue hits $80,000 for 200 available rooms, pushing TRevPAR to $400.
GOPPAR Says: “You’re Killing It!”
Because the resort’s operational costs are well-managed, 50% of that revenue turns into profit. GOPPAR? A robust $200.
Here, TRevPAR and GOPPAR confirm what RevPAR hinted at—but they also show how smart upselling and cost control amplify success.
Scenario 3: The “Hidden Cost Trap”
RevPAR Says: “It’s a Slow Day.”
A city hotel’s RevPAR dips to $80 during the off-season.
TRevPAR Says: “We’re Still in the Game.”
Guests are spending money on co-working spaces and the rooftop bar, keeping total revenue at $15,000 for 100 available rooms. TRevPAR climbs to $150.
GOPPAR Says: “We’re Not Out of the Woods Yet.”
However, higher marketing expenses to attract off-season travelers eat into profits. GOPPAR lands at $30, highlighting the need to control costs even when diversifying revenue streams.
