Case Study: Room Revenue Per Available Room

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ESSAY 1-700 WORDS Paragraph 1 – introduction. This should refer to the essay title and tell the reader what the essay is about in the order that the information will be presented. REVPAR: Room Revenue per available Room In today’s dynamic scenario and ever changing economies it is necessary to evaluate the revenues and expenses of your hotels and keep track of records in an updated tabulated way. For the same, analysis of certain industry ratios like the Revenue Per Available Room (RevPAR), the Average Daily Rate (ADR) and the Occupancy Rate, it becomes quite convenient to make a comparison between the previous year and the present year. Revenue Per Available Room (RevPAR), is certainly the most crucial ratio popularly used to assess the…show more content…
Both are different as REVPAR is about revenue and GOPPAR is about profit. Hence it is contradictory that REVPAR portraits the country level captivity of the hospitality industry and therefore helps in analyzing the top line whereas GOPPAR effects the bottom line. GOPPAR addresses the cost allocation and control of management of the hotel and is a compulsion for formulating any proper room pricing strategy. Logically REVPAR is a rather ineffective measurement but the fact stays that it should not be the only tool for measuring the hotels revenue. Revenue Mix: REVPAR measures only the total rooms’ income generator and it doesn’t take into account revenues from other areas of the hotel. This resulted in an inaccurate analysis when comparing hotel performances. Consequently arose the need for GOPPAR /PROFPAR which stated the total operating profit of the hotel and helps delve into numbers to survive in this competitive environment. By Elie Younes, Associate, HVS…show more content…
On the other hand, GOPPAR provides a rooted hint of a hotel's profitability by taking into regard management control and efficiency. In addition, GOPPAR offers an overall more sturdy performance measure, especially when comparing the financial performances of hotels with different sizes or in different markets. The use of GOPPAR as a addition to RevPAR for hotel performance will thus enable a more accurate basis for hotel investment appraisal than relying merely on

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