Why you ask? Well, REVPAR has two components: occupancy and rate. That is all you need to square the calculation. GO PAR has six components and I am going to lay them all out here.
A big part of the struggle people have is the idea that GO PAR is an accounting thing. It is true that the calculation is based on accounting theory but stick with me here, it is a straightforward concept. GO PAR like REVPAR is easy to square. You just have six pieces to deal with not two.
The way the accounting system works allows us to group these six items together because each account is recorded separately. If we have all the amounts from each of these six items and the hotel follows the uniformed system of accounts for the lodging industry “USALI,” You Sally, then we have absolutely every dollar captured, and we simply divide the total amount from each group by the same available rooms. These six items equal the hotel’s GOP every time, in every hotel.
There are no other items that we need to consider so long as we follow You Sally.
I am going to define and give you an example of each of the six components just so we are clear. Remember, we just divide each by the total rooms available for the same corresponding period.
The way the accounting system works allows us to group these six items together because each account is recorded separately. If we have all the amounts from each of these six items and the hotel follows the uniformed system of accounts for the lodging industry “USALI,” You Sally, then we have absolutely every dollar captured, and we simply divide the total amount from each group by the same available rooms. These six items equal the hotel’s GOP every time, in every hotel.
There are no other items that we need to consider so long as we follow You Sally.
I am going to define and give you an example of each of the six components just so we are clear. Remember, we just divide each by the total rooms available for the same corresponding period.
With these six items grouped into their own separate boxes we encompass everything that makes up a hotel’s GOP.
Be sure to check out my other articles on GO PAR. The new superstar of the hotel financial landscape.
For more information about David Lund, visit hotelfinancialcoach.com
David Lund
David Lund is The Hotel Financial Coach, an international hospitality financial leadership expert. He has held positions as a Regional Financial Controller, Corporate Director and Hotel Manager with an international brand for over 30 years. He authored an award-winning workshop on hospitality financial leadership and has delivered it to hundreds of hotel managers. David coachs hospitality executives and delivers his Financial Leadership Training throughout the world, helping hotels increase profits and build financially engaged management teams. He speaks at hospitality company meetings, associations and he has had several articles published in hotel trade magazines and he is the author of three books on Financial Leadership. David is a Certified Hotel Accounting Executive through HFTP and a Certified Professional Coach.
David Lund
The Hotel Financial Coach
Phone: +1 415 696 9593
david@hotelfinancialcoach.com