Tag: Gross operating profit

Jeffrey Scott Sussman is an experienced hotel GM. During his recent appointment as general manager of Hashoo Group in Dubai, Jeffrey Scott Sussman successfully raised the organization’s gross operating profit from 37 to 52 percent in less than two years.

In the hospitality industry, gross operating profit (GOP) is a key performance indicator (KPI) that represents a hotel’s profits after removing operating expenses, with a goal of demonstrating the hotel’s profitability while fully operational. While more useful than simple gross profit, hotel managers can derive even more information by reviewing gross operating profit per available room (GOPPAR) and adjusted gross operating profit (AGOP).

GOPPAR is arguably the most useful metric in terms of a hotel’s performance and overall revenue management. Through GOPPAR analysis, managers gain a clear picture of the hotel’s value on a day to day basis, or even hourly, as both a piece of real estate and functioning business. To view a hotel’s GOPPAR at any given time, the GOP must be divided by the number of available rooms.

Finally, AGOP analytics involve removing hotel base management fees, such as salaries, from the hotel’s GOP. By adjusting a hotel’s GOP, management can ascertain an even clearer picture of where profits can be optimized and expenses better managed.

An accomplished hotel general manager, Jeffrey Scott Sussman led a team of 650 employees in his role as the GM of Hashoo Group in Dubai. During his time in this position, Jeffrey Scott Sussman drove the hotel’s gross operating profits (GOP) from 37 percent up to 52 percent.

Gross operating profit (GOP) is one of the most important key performance indicators (KPI) in the hospitality industry. Instead of merely calculating total revenue, GOP examines operating expenses and measures these figures against the number of available rooms over a select period.

To calculate GOP, hotel managers subtract all gross revenue from the hotel’s operating expenses, leaving the hotel’s GOP. Dividing the GOP by the number of available rooms at the hotel determines the GOP

GOP can be compared to revenue per available room (RevPAR) metrics, though key differences between the two exist. RevPAR is a quick measurement of revenue, but this measurement does not account for any other aspect of a hotel’s operational health.

GOPPAR, by comparison, allows hotel leaders to understand the role of different revenue sources, such as hotel restaurants, while also considering the impact of all associated expenses.