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Revpar

 

            
             The leading industry standard for measuring a business's success is called RevPAR. According to the article by Gary Carr and our text RevPAR is the revenue per available room. Sometimes during hard economic conditions it is necessary for managers to go deeper into the numbers in order for them to come up with a competitive edge. The alternative to RevPAR is ProfPAR or GOPPAR. ProfPAR and GOPPAR both refer to gross maximum profits per room. These alternative ways of measuring the success of the hotel can be very important under certain economic conditions. .
             Larkspur Hospitality company of San Francisco, currently uses GOPPAR as its measurement for success. The company currently uses GOPPAR, because they feel that it provides a clearer picture of the hotels bottom line. The key benefit to GOPPAR is the ability for the company to control their budget. The company can look at the market and see what customers are willing to pay for a room and adjust price accordingly to cover gross costs. By looking at the gross profit per room it is possible to get a better understanding of owner's wealth and operating efficiency. GOPPAR takes into account all aspects of operating expenses per hotel. GOPPAR looks at food and beverage sales, departmental revenues, and banquet sales in order to come up with a total gross profit for the hotel. This is very important, because two different hotels with the same number of rooms that charge different rates per room do not mean that the higher room rate hotel makes more money. Larkspur Hotel uses this method, because they feel that GOPPAR provides a much more accurate description of the overall success of their various properties. This better understanding of the bottom line of the hotel provides managers with a lot more useful information when it comes time to make decisions on the hotels success.
             I think that GOPPAR is definitely a better way for a hotel to look at its market potential.


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