RevPAR measures room revenue; GOPPAR measures operating profit per available room; NOI and distributable owner cash require additional cost definitions. These measures are not interchangeable. (costar.com)
| Measure | Practical definition | What it does not establish |
|---|---|---|
| RevPAR | Room revenue ÷ available room nights | Profit after labor, distribution and other costs |
| GOPPAR | Gross operating profit ÷ available room nights | Owner cash after all property and financing obligations |
| NOI | A specified property-income measure after defined operating costs | Consistent reserve treatment unless explicitly stated |
| Owner cash | Cash remaining after the model’s operating, capital, financing and liquidity obligations | Permission to distribute under every contract or tax structure |
What does the revenue-to-cash bridge look like?
Hypothetical annual illustration; all figures are assumptions:
| Item | Amount |
|---|---|
| Total hotel revenue | $6,000,000 |
| Departmental and undistributed operating costs | ($4,200,000) |
| Gross operating profit | $1,800,000 |
| Management fees excluded from the preceding costs | ($180,000) |
| Property taxes, insurance and other specified owner costs | ($420,000) |
| Property income before replacement allowance | $1,200,000 |
| Funded replacement allowance | ($240,000) |
| Cash before debt service | $960,000 |
| Debt service | ($720,000) |
| Remaining cash | $240,000 |
The final figure is before owner income taxes, additional working-capital needs and unmodeled obligations. The example assumes distribution and affiliation expenses are already included in operating costs where applicable.
Control: identify the location of every fee before subtracting it. Do not deduct the same commission, reserve transfer or capital payment twice.