Restaurants, hotels and travel
GOP (gross operating profit)
A hotel's profit after the costs of running it, before fees, rent and ownership costs.
Facts checked against sources onWhat does GOP (gross operating profit) mean?
Gross operating profit is a hotel's total revenue minus the costs of running its departments (rooms, food and beverage) and its undistributed operating expenses (sales and marketing, administration, maintenance, utilities). It comes before management fees, rent, property taxes, insurance, depreciation and interest, as laid out in the industry's Uniform System of Accounts for the Lodging Industry. Example: revenue of 10 million and operating costs of 6.2 million give a GOP of 3.8 million, a GOP margin of 38 percent. Hotel operators are often paid an incentive fee based on GOP or on profit after their base fee.
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Related terms
- Management contract (hotels)A deal where a hotel company runs a hotel it does not own, in return for fees.
- RevPAR (revenue per available room)Rooms revenue divided by all rooms available: occupancy times ADR.
- EBITDAEarnings before interest, taxes, depreciation and amortization.
- Operating leverageHow much profit swings when revenue changes, because of fixed costs.
- Prime costFood and drink cost plus labour cost, the two biggest restaurant costs.
- Table turnsHow many times each table is used by a new group in a meal period or day.
- CoverOne guest served a meal: the unit restaurants count.
- Same-store sales (comparable sales)The US name for like-for-like sales: growth at restaurants or stores open in both periods.
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