Every month in 2026 I have opened at least one owner report that celebrates RevPAR and buries the profit line on page six. RevPAR is up, the management company is happy, and the owner is asking me a quieter question: if rooms revenue grew, why did so little of it reach the bank account? That question is the whole GOPPAR vs RevPAR debate in one sentence.
The national numbers make the gap easy to miss. CoStar and Tourism Economics raised their 2026 forecast in August to 4.4 percent RevPAR growth for U.S. hotels, helped by the World Cup and America 250 travel. In the same release they called rising operating expenses "worrisome", because costs are climbing faster than inflation. A hotel can ride a good RevPAR year and still end it with less profit per room than it had in 2019.
In this article I explain what separates the two metrics, why the 2026 market rewards hotels that manage to GOPPAR, how I calculate it in an audit, a worked example where the lower RevPAR strategy earns more profit, and what owners should change before the slower 2027 budget year arrives.
GOPPAR and RevPAR Measure Different Things
GOPPAR and RevPAR answer different questions for a hotel. RevPAR tells an owner how much rooms revenue each available room produced. GOPPAR tells the owner how much gross operating profit each available room produced after labor, commissions, utilities and overhead. A hotel can win on RevPAR and lose on GOPPAR in the same month.
GOPPAR is gross operating profit divided by the number of available room nights in the period. RevPAR is rooms revenue divided by the same available room nights, or occupancy multiplied by ADR. Both share a denominator, which is why owners like to put them side by side. The numerators are completely different animals.
RevPAR counts only the rooms department, and only on the revenue line. It ignores food and beverage, parking, spa, meeting space and every other department. It also ignores what it cost to sell the room. A room sold at $160 through a channel charging 18 percent commission and a room sold at $160 on your own website add exactly the same amount to RevPAR.
GOPPAR follows the Uniform System of Accounts for the Lodging Industry (USALI) logic: total operating revenue, minus departmental expenses, minus undistributed operating expenses such as administrative and general, sales and marketing, property operations and maintenance, IT, and utilities. What remains is gross operating profit, the number before management fees, rent, insurance, property tax and debt service.
Where each metric belongs
I do not want anyone to throw RevPAR away. It is still the fastest read on whether pricing and demand capture are working, and it is the metric your competitive set data is built on. RevPAR Index, which compares your RevPAR with the comp set, remains the cleanest measure of market share. GOPPAR cannot be benchmarked weekly in most markets, because profit data is collected monthly and from a smaller sample.
| Question | RevPAR | GOPPAR |
|---|---|---|
| What does it measure? | Rooms revenue per available room | Gross operating profit per available room |
| Includes other departments? | No | Yes, all operated departments |
| Includes cost of sale? | No | Yes, commissions, labor, supplies, utilities |
| How often can you benchmark it? | Daily and weekly against a comp set | Monthly, against a profit benchmark sample |
| Who owns it? | Revenue manager and director of sales | General manager, asset manager, owner |
| Best use | Pricing and market share decisions | Judging whether revenue strategy pays |
Bottom line: RevPAR tells you whether you sold rooms well, GOPPAR tells you whether selling them was worth it, and a 2026 owner report needs both on page one.
Why Is RevPAR Up While Profit Lags in 2026?
Hotel RevPAR is up in 2026 while profit lags because operating costs and booking costs have grown faster than rates for several years. HotStats data shows U.S. GOPPAR in 2025 still about 10 percent below 2019, with wages 15.3 percent above 2019 and operating revenue only 12.8 percent above it.
The top line in 2026 has been better than almost anyone expected. CoStar and Tourism Economics started the year forecasting U.S. RevPAR growth of just 0.6 percent, raised it to 2.8 percent in June, and raised it again in August to 4.4 percent. Their August 2026 forecast puts full-year occupancy at 63.1 percent and ADR growth at 3.1 percent. CoStar's monthly data for August 2026 showed U.S. occupancy of 66.4 percent, ADR of $161.78 and RevPAR of $107.43, up 2.0 percent year over year.
Look underneath and the growth is narrow. When CoStar's analysts upgraded the forecast in June 2026, they noted that without ten of the top 25 markets, U.S. RevPAR for 2026 would be negative, and that economy and select-service hotels were still under pressure on ADR. If your hotel is a 90-room select-service property outside a World Cup host city, the national 4.4 percent is not your year.
The cost side kept moving
HotStats reported in December 2025 that payroll per available room, which it calls PayPAR, was growing around 4 to 5 percent year on year and outpacing revenue in most months. The same analysis found GOP margins of 30.3 percent at unionized U.S. hotels against 36.5 percent at non-union hotels, and estimated that hotels needed revenue growth of at least 5.0 percent just to produce a modest profit improvement.
Put those two facts together. A forecast 4.4 percent RevPAR gain in 2026, against payroll growth of 4 to 5 percent, leaves very little room for profit expansion unless the hotel manages the cost of each sale. The hotels that do grow profit this year are the ones that grew rate rather than volume, protected direct business, and kept labor per occupied room flat.
Some hotels are winning
To be fair to the market, not every sample shows a squeeze. HotelData.com's H1 2026 profitability report shows its U.S. sample lifting RevPAR 8.9 percent to $144.01, TRevPAR 9.2 percent to $189.30, and GOP margin 3.6 points to 44.9 percent. In Q2 2026 that sample reached a 47.2 percent GOP margin, up from 43.9 percent. That is what flow-through looks like when rate leads the growth and costs are held.
Bottom line: the 2026 RevPAR rebound is real, but in 2026 it only becomes profit for hotels that grow rate faster than payroll and commissions, so check your own GOPPAR before you celebrate the national number.
Flow-Through Is the Number Owners Miss
Flow-through is the share of each additional revenue dollar that a hotel keeps as gross operating profit. It is calculated as the change in GOP divided by the change in total revenue. Flow-through is the bridge between RevPAR and GOPPAR, and it is the number I ask for first in an owner meeting.
HotStats data published in January 2026 put 2025 flow-through at 18 percent in the Americas and 29 percent in Europe, against a historical level of about 50 percent. The same analysis found that global RevPAR had grown 19 percent since 2019 while booking costs per available room had grown 25 percent. In plain words, hotels have been paying more to acquire each booking than the booking itself has grown.
Take a simple example. A hotel adds $200,000 of total revenue in 2026 compared with 2025. At the old 50 percent flow-through, GOP rises $100,000. At the 18 percent HotStats recorded for the Americas in 2025, GOP rises only $36,000. The RevPAR chart looks identical in both cases. The owner's distribution looks very different.
What drags flow-through down
- Volume growth from discounted rates, which adds housekeeping, laundry and amenity cost for every extra room night.
- A rising share of commissionable bookings, especially from OTAs and wholesale.
- Short stays, which add a full room clean and check-in for every night of revenue.
- Overtime and agency labor used to cover occupancy spikes the forecast did not predict.
- Promotions that add room nights the hotel would have sold anyway at a higher rate.
- Revenue in low-margin departments, such as banquets priced to win the business rather than to earn on it.
When I audit hotels, flow-through below 30 percent almost always traces back to the first three items on that list. Rarely is the cause a general manager who overspends. More often, the commercial strategy chose volume, and the operation paid for it.
Bottom line: if your hotel cannot tell you its flow-through for the last twelve months, you do not yet know whether its RevPAR growth in 2026 made any money.
How Do You Calculate GOPPAR Correctly?
To calculate GOPPAR, take total operating revenue for the period, subtract departmental expenses and undistributed operating expenses to reach gross operating profit, then divide by available room nights. Available room nights are rooms in inventory multiplied by days in the period, including rooms that did not sell.
The formula is short. The errors are in the inputs. In the P&L reviews I run, I see the same four mistakes again and again.
The four GOPPAR mistakes I find
First, out-of-order rooms are removed from the denominator. That flatters both RevPAR and GOPPAR. Keep every room the hotel owns in available room nights, unless the whole wing is formally closed, and report out-of-order rooms separately so nobody hides a maintenance problem inside a metric.
Second, commissions are booked below GOP or netted from revenue inconsistently. Under USALI, commissions belong in departmental expenses. If one month nets them from revenue and the next books them as an expense, the trend line is meaningless.
Third, management fees are included above GOP. They sit below it. Including them makes your GOPPAR look worse than a benchmark sample and starts arguments that are really about accounting.
Fourth, the comparison period is wrong. GOPPAR is seasonal, like RevPAR. Compare a month with the same month last year, or use a rolling twelve months. Comparing August with March tells you nothing about management.
A quick GOPPAR calculation
Example: a 120-room hotel in a 31-day month has 3,720 available room nights. Total operating revenue is $620,000. Departmental expenses are $210,000 and undistributed operating expenses are $165,000. GOP is $620,000 minus $375,000, which is $245,000. GOPPAR is $245,000 divided by 3,720, or $65.86. GOP margin is $245,000 divided by $620,000, or 39.5 percent.
Bottom line: GOPPAR is only as honest as its denominator and its expense classification, so lock both definitions in writing before you compare 2026 with 2025.
GOPPAR Worked Example for an 80-Room Hotel
This GOPPAR worked example compares two pricing strategies for the same 80-room hotel over a 30-day month in 2026. Strategy A chases occupancy with OTA promotions. Strategy B holds rate and protects direct demand. Strategy A wins on RevPAR. Strategy B wins on GOPPAR, which is the number the owner banks.
The assumptions below are an example, not a client. The hotel has 80 rooms, so 2,400 available room nights in a 30-day month. Variable cost per occupied room (housekeeping labor, laundry, amenities, utilities, payment fees) is $38. OTA commission averages 18 percent. Fixed and semi-fixed costs that do not move with occupancy total $90,000 for the month. To keep the arithmetic readable, I use rooms revenue only.
| Line | Strategy A: chase occupancy | Strategy B: hold rate |
|---|---|---|
| Occupancy | 72% | 66% |
| ADR | $150 | $160 |
| Room nights sold | 1,728 | 1,584 |
| Rooms revenue | $259,200 | $253,440 |
| RevPAR | $108.00 | $105.60 |
| OTA share of revenue | 70% | 50% |
| Commissions at 18% | $32,659 | $22,810 |
| Variable cost at $38 per occupied room | $65,664 | $60,192 |
| Contribution after variable costs | $160,877 | $170,438 |
| Fixed and semi-fixed costs | $90,000 | $90,000 |
| Gross operating profit | $70,877 | $80,438 |
| GOPPAR | $29.53 | $33.52 |
| GOP margin | 27.3% | 31.7% |
What the example shows
Strategy A produces $2.40 more RevPAR and $5,760 more rooms revenue. It also sells 144 more room nights, each costing $38 to service, and pushes more of its revenue through a commissionable channel. The result is $9,561 less gross operating profit for the month, a GOPPAR $3.99 lower and a GOP margin 4.4 points lower.
Over twelve months, if the pattern held, that is roughly $115,000 of profit given away while the RevPAR report looked better. On a hotel valued on its net operating income, the cost to the owner is a multiple of that number at sale or refinance.
The example does not prove that higher rate always wins. If Strategy B's rate pushed occupancy down to 58 percent, it would lose on both metrics. The point is narrower: the right answer can only be found by running the decision through cost per occupied room and channel cost, never by comparing RevPAR alone.
Bottom line: in this 2026 example the hotel with the lower RevPAR earns more GOPPAR, so price every promotion against net contribution per available room before you launch it.
GOPPAR Changes These Revenue Decisions
Managing to GOPPAR changes five everyday revenue decisions at a hotel: how deep discounts go, how much OTA and wholesale volume to accept, which length-of-stay restrictions to use, how to price groups, and when to close low-rated inventory. Each decision is judged on net contribution per available room rather than on revenue alone.
Discount depth
A 15 percent promotion has to create enough new room nights to cover both the rate given away on bookings you would have taken anyway and the variable cost of the extra rooms. In most audits I run, the promotion data shows the opposite: most of the bookings would have come at the full rate. That is the pattern I described in my piece on where hotel revenue leaks.
Channel mix
Two bookings with the same ADR are not equal when one carries an 18 percent commission. When I review channel mix, I rank channels by net ADR after commission and payment cost, not by gross production. That simple re-ranking often shows that a hotel's second-biggest channel is its least profitable. Our team's hotel OTA optimization work starts from that net view.
Length of stay and restrictions
One-night stays cost more per night to service than three-night stays, because the room is fully cleaned and turned every day. On peak nights, a minimum length of stay or a closed-to-arrival restriction can lower occupancy slightly and still raise GOPPAR. I test this on the hotel's own data before recommending it.
Group pricing
Group rooms usually carry lower ADR but can bring meeting room rental and catering revenue. A displacement analysis that stops at rooms revenue undervalues the group. One that includes banquet margin, not banquet revenue, prices the group correctly.
Closing low-rated inventory
On a night forecast to sell out, the last rooms should never go to the lowest-net channel. A revenue manager watching GOPPAR closes deep discount and high-commission rates first, then lets the hotel fill at full net rate.
Bottom line: a 2026 revenue strategy built on GOPPAR does not chase every booking, it chooses the bookings that leave the most profit per available room.
Which Metric Should Owners Report Monthly?
Hotel owners should report both metrics monthly, in a fixed order: RevPAR Index for market share, then net RevPAR after distribution cost, then GOPPAR and flow-through. RevPAR alone cannot show profit, and GOPPAR alone cannot show whether the hotel is losing ground to its competitive set.
Most owner reports I read have the order upside down. They lead with RevPAR growth, follow with occupancy and ADR, and leave GOP for an appendix. The result is a meeting about the market instead of a meeting about the hotel.
My monthly owner reporting checklist
- RevPAR Index for the month and the rolling twelve months, against an honest competitive set.
- Occupancy and ADR, with both the hotel's change and the comp set's change.
- Net RevPAR after commissions and payment costs, by channel.
- Cost per occupied room for rooms labor and supplies, against the same month last year.
- Total revenue per available room (TRevPAR) and GOPPAR, against the same month last year.
- Flow-through on the year-over-year revenue change, with one sentence explaining it.
- The three decisions taken this month and the GOPPAR effect each one is expected to have.
The last item is the one I insist on. It forces the revenue team to say, in writing, why a promotion or a group is good for profit, not just for occupancy. If you also want to know where the hotel stops losing money, my earlier piece on calculating hotel break-even occupancy pairs naturally with this report.
For full-service hotels, revenue outside the rooms department matters too. Revenuenaire's guide to total revenue management for hotels covers how to price meeting space, food and beverage and ancillaries with the same discipline as rooms.
Bottom line: an owner report in 2026 should open with market share and close with GOPPAR and flow-through, so every RevPAR gain is tested against profit in the same meeting.
GOPPAR Outlook for 2027 and What to Do Now
The GOPPAR outlook for 2027 is tighter than 2026 for most U.S. hotels. CoStar and Tourism Economics forecast 2027 RevPAR growth of only 2.1 percent and ADR growth of 1.6 percent, while HotStats reports payroll per available room growing 4 to 5 percent a year. Unless hotels improve flow-through, margins will shrink again.
The arithmetic is not complicated. If rooms revenue grows 2.1 percent and payroll, the largest cost line, grows 4 percent, payroll takes a bigger share of every revenue dollar. The forecasters also named U.S. and Canada trade tensions as a possible headwind for international visitation, which matters for border markets and gateway cities.
2027 budgets are being written now, in October and November 2026. That is the moment to change what the hotel aims for. A budget that targets RevPAR growth without a GOPPAR target and a flow-through assumption invites a year of volume chasing.
What I would do before January 2027
Set the 2027 budget with three linked targets: RevPAR Index, net RevPAR after distribution cost and GOPPAR. Model the cost per occupied room for each occupancy level, so the team knows what a point of occupancy costs as well as what it earns. Rank every channel by net ADR and set a ceiling on the lowest-net channels for compression dates. Review the length-of-stay rules for the twenty highest-demand dates of 2027. Write down the discount rules, including the maximum depth and the evidence each promotion needs to continue.
When I take on a hotel in a budget season, the change that moves GOPPAR fastest is rarely a new rate. It is the decision to stop one or two promotions that the data shows were giving away rate, and to move that inventory back to channels that cost less. If your team has never built a budget this way, an outside view through hotel revenue management consulting can set the targets and the reporting before the year starts.
Bottom line: with 2027 RevPAR growth forecast at 2.1 percent, the hotels that protect profit will be the ones that budget for GOPPAR and flow-through now, not the ones that budget for occupancy.
Frequently Asked Questions
Is GOPPAR better than RevPAR?
GOPPAR is better than RevPAR for judging hotel profitability, and RevPAR is better for judging pricing and market share. GOPPAR includes costs and all departments, while RevPAR counts only rooms revenue. I use RevPAR Index weekly for commercial decisions and GOPPAR monthly to check that those decisions actually made money.
What is a good GOPPAR for a hotel?
A good GOPPAR depends on the hotel's market, class and service level, so compare against the same month last year and a matched profit benchmark. As a reference point, HotStats reported a 12-month rolling GOPPAR of $105.42 for the Americas in August 2025, and HotelData.com's U.S. sample reached a 44.9 percent GOP margin in H1 2026.
How do you calculate GOPPAR?
GOPPAR equals gross operating profit divided by available room nights. Gross operating profit is total operating revenue minus departmental expenses and undistributed operating expenses, before management fees, rent, insurance, property taxes and debt service. Available room nights are all rooms in inventory multiplied by the days in the period.
Can RevPAR go up while GOPPAR goes down?
Yes, RevPAR can go up while GOPPAR goes down when the extra revenue costs more to earn than it brings in. Discounted volume, a higher OTA share, more one-night stays and payroll growth above revenue growth all cause it. HotStats data shows U.S. GOPPAR in 2025 still about 10 percent below 2019 despite higher revenue.
What is a good flow-through for a hotel?
A good flow-through for a hotel is 50 percent or higher on year-over-year revenue growth, which HotStats describes as the historical norm. HotStats data shows the Americas averaged only 18 percent in 2025 and Europe 29 percent. Below 30 percent, I would review discounting, channel mix and labor per occupied room first.
Should a hotel revenue manager be measured on GOPPAR?
A hotel revenue manager should be measured partly on GOPPAR, alongside RevPAR Index and net RevPAR after distribution cost. The revenue manager controls rate, channel and restrictions, which drive a large share of GOPPAR, but not labor scheduling or utilities. I pair a market share target with a net revenue target and a shared GOPPAR goal.
When should a hotel hire a revenue management consultant?
A hotel should hire a revenue management consultant when RevPAR is growing but GOPPAR is flat, when flow-through falls below 30 percent, or when nobody owns net revenue by channel. Below about 25 rooms with simple demand, an owner can often manage alone. Alaa Elhadi and the team at Revenuenaire handle independent hotels above that size worldwide.
My Verdict
GOPPAR vs RevPAR is not a contest. RevPAR tells you how well you are selling, and GOPPAR tells you whether selling that way pays. In 2026 the gap between them is wider than at any time I remember, because rates finally recovered while payroll and booking costs kept climbing. With CoStar and Tourism Economics forecasting just 2.1 percent RevPAR growth for 2027, the hotels that grow profit next year will be the ones that start measuring net contribution per available room now. If you want a second opinion on your own numbers, or a 2027 budget built around GOPPAR, book a call with Alaa's team and we will start with your last twelve months.
