Profit and Loss

The global hotel industry is firmly positioned in an era of normalized growth levels. That means to achieve greater profits, hotel owners and operators need to explore every possible revenue stream while also working to manage expenses. 

Labor is typically one of the highest expenditures for hotels on average. The issue of acquiring labor became more complex during the COVID-19 pandemic, with many workers opting for employment in other sectors or not returning to the hospitality workforce after a period of layoffs and furloughs.

What is GOPPAR?

One of the hospitality industry’s key bottom-line metrics, gross operating profit per available room measures the relationship between hotel revenues and expenses. In general, the better you understand GOPPAR, the better you will be at turning revenue into profit. That is why it is important to benchmark your GOPPAR, along with the other key P&L metrics, on a consistent basis. 

Regardless of how the hotel industry benchmarks performance, the end goal is always maximum profitability. Like all other elements of industry benchmarking, there are data sets and reports designed specifically to measure the success of that goal.

Key to understanding your hotel’s profitability, your P&L statement outlines your profits or losses over a given time period—as the name suggests.

Hotel owners and operators are best positioned for success when they measure their business from every angle. That is why no benchmarking experience can be considered comprehensive without frequent insight into the bottom line.  

Tracking hotel operating expenses is vital in understanding your property's financial performance and better managing costs, which is part of the equation for increasing your profit margins. Given that gross operating profit is calculated by subtracting total operating expenses from total operating revenues, minimizing expenses and maximizing revenue is the obvious approach to boosting profits.

How P&L statements help you understand your hotel profitability

Understanding your hotel’s financial performance involves thorough analysis of your balance sheet and what is often called your income statement – more commonly referred to as your

In a previous post, we discussed the vital role of RevPAR when measuring hotel performance.

If you’re familiar with the hotel revenue management discipline, you probably know that its strategic cycle comprises four main stages—analyze, identify, develop and monitor. You’re probably also familiar with the STAR Report and the dSTAR platform, which empower you with the data intelligence needed to navigate each of those stages and measure your property’s performance on an ongoing basis.