Analysis Of Room Revenue Per Available Room

787 Words2 Pages
bulb-icon

Recommended: The summary of the hotel industry

ESSAY 1
Paragraph 1 - introduction (RevPAR) and (GOPPAR)
Room Revenue per available Room (RevPAR)
In today’s dynamic scenario and ever changing economies it is necessary to evaluate the revenues and expenses of your hotels and keep track of records in an updated way. For the same, analysis of certain industry ratios like the Revenue Per Available Room (RevPAR), and Average Daily Rate (ADR) becomes quite convenient to make comparisons between several years. Revenue Per Available Room (RevPAR), is certainly the most crucial ratio popularly used to assess the financial performance in hospitality business. It helps in pricing guest rooms tactfully.

http://hmghotelsblog.com/2013/05/13/revpar-how-to-maximize-hotel-revenue/
Gross Operating Profit …show more content…

It combines room occupancy and room rate data to measure hotels total room revenues.
Gross operating profit per available room (GOPPAR) is defined as total gross operating profit (GOP) per available room per day.It is also defined as a hotel’s total revenue minus its management’s controllable expenses per available room. higheredbcs.wiley.com/legacy/college/dopson/.../notes/chapter08.doc Paragraph 3
It should be noted that Gross operating profit per available room (GOPPAR)is highly sensitive to any fluctuation in Revenue Per Available Room (RevPAR).The profit margin of the rooms department is considerably higher than that of any other revenue generating department. Hence a slight fluctuation in Revenue Per Available Room (RevPAR) can have a significant effect on Gross operating profit per available room (GOPPAR).
Its conversion into Gross operating profit per available room (GOPPAR) is high, so a slight fluctuation in the former has a significant effect on GOPPAR. Therefore, Gross operating profit per available room (GOPPAR) is regarded as a complement to Revenue Per Available

Show More
Related

  • Revenue Determination Bases

    1089 Words  | 3 Pages

    ...-based, charge-based, and contractual payment systems. (p. 7). CRC Press. Retrieved from http://books.google.com/books?id=sCzhN9HruM0C&dq=fee schedule based payment&source=gbs_navlinks_s

    Read More

  • Home Depot Case Study

    734 Words  | 2 Pages

    The 3 percent decline in sales causing a 21 percent decline in profits can be attributed to the identification of the accounting concept of operating leverage. Operating leverage is what business managers apply to boost small changes in revenue into sizable changes in profitability. Fixed cost is the force managers use to attain disproportionate changes between revenue and profitability. Therefore, when all costs are fixed every sales dollar contributes one dollar toward the potential profitability of a project. Once sales dollars cover fixed costs, each additional sales dollar represents pure profit. A small change in sales volume can significantly affect profitability (Edmonds, Tsay, & Olds, 2011). So, therefore, if sales volume increases,

    Read More

  • Financial Analysis of Verizon versus AT&T

    1338 Words  | 3 Pages

    Ratio analysis are useful tools when judging the performance of a company by weighing and evaluating the operating performance (Block-Hirt). There are 13 significant ratios that can separate by four main categories, profitability, asset utilization, liquidity and debt utilization ratios. The ratio analysis covered here consists of eight various ratios with at least one from each of these main categories. These ratios were used to compare and contrast the performance of Verizon versus AT& T over the years 2005 and 2006.

    Read More

  • Harley-Davidson Performance Analysis

    1508 Words  | 4 Pages

    The first method we will review is the accounting method. Through this accounting approach we will analyze specific ratios and their possible impact on the company's performance. The specific ratios we will review include the return on total assets, return on equity, gross profit margin, earnings per share, price earnings ratio, debt to assets, debt to equity, accounts receivable turnover, total asset turnover, fixed asset turnover, and average collection period. I will explain each ratio in greater detail, and why I have included it in this analysis, when I give the results of each specific ratio calculation.

    Read More

  • Analysis of the Johns Hopkins Hospital

    1049 Words  | 3 Pages

    Organizations use financial statements and ratio analysis assess financial performance viability. The ratio analysis are used to identify trends and to perform organizational comparison (financial) with other companies within same industry. Ratio analysis, using data reported on the financial statements, are divided into five major categories: common size, liquidity, solvency, efficiency, and profitability. This paper will assess the financial stability of John Hopkins Hospital (JHH) using the five ratio analysis.

    Read More

  • Premier Inn Case Study

    1047 Words  | 3 Pages

    £ - Premier Inn revenue 1.822 mil. £). Managing the rising demand is the main challenge if they want to maintain their leading position and rising popularity in the market. In annual report it has been stated that insufficient reservation system and failure, caused business interruption, process failure and financial loss and taken given place in Principal Risks and Uncertainties section in annual report. ( annual report andreas risks) This essay will mainly focus on the importance of demand forecast and management in Hotels Industry by using Premier Inn Data and concentrate on the possible improvements can be achieved through Advance Booking Methods in Forecasting Hotel Reservations.

    Read More

  • Analysis Of Nightlife

    691 Words  | 2 Pages

    During the 1940’s, the world found itself dealing with World War II and in the United States ,a huge African culture movement swept throughout the north-eastern states. One specific artist that captivated the “Nightlife” of African Americans during that era was Archibald Motley Jr. He painted a series of paintings that involved African Americans and their culture. In the painting, “Nightlife” we see a group of African Americans dancing at a club/bar, enjoying life, and swaying their hips to the music. Perhaps, in this painting, Motley wanted his public to notice the breakthrough, blacks had during the 1940’s and wanted to show how music took their mind on a different stroll apart from the troubling issues the world was dealing with. Archibald wanted the world to notice the dynamic and exciting Negro culture.

    Read More

  • Revenue Management Case Study

    866 Words  | 2 Pages

    Additionally, it measures the speed with which to institute restrictions on non refundable rates, length of stay in the facility and prediction of arrivals. As a management toll, revenue management has enhanced cost control, distribution channels and getting the right marketing mix in the business. In summary, revenue management is critical in the hotel industry for sales of rooms and services as the main products at the right price, time and right

    Read More

  • Management Analysis of Hilton Hotels

    1797 Words  | 4 Pages

    Hilton Worldwide carries out business through three segments: (1) management and franchise; (2) ownership; and (3) time-share. These business segments enable management to capitalize on strengths like brand recognition and economies of scale. The company focuses primarily on the management and franchise segment which consist of 3,918 hotels with 610,413 rooms. Managing the properties, rather than owning them, allows the company t...

    Read More

  • Case Study Of Dinner Bell Hotel

    2655 Words  | 6 Pages

    However the cash surplus generated during peak period that is July to November is typically enough to meet the short fall. But this year the hotel requires major renovations in order to be continually be able to attract guests. They estimated that the renovations will cost $250000 but now it appears that $300000 of work is necessary. Also their long term group also manager has also left unexpectedly and her replacement is not as effective in obtaining business from the regional business and organization. Furthermore their revenues have also declined by 15% for January and February and advance booking are also down. Thus a cash flow forecast is made to estimate the

    Read More

  • Ratio Analysis Essay

    519 Words  | 2 Pages

    Ratios analysis also makes possible comparison of the performance of different divisions of the firm. The ratios are helpful in deciding about their efficiency or otherwise in the past and likely performance in the future.

    Read More

  • Vertical Analysis Of Competition Bikes

    1376 Words  | 3 Pages

    Competition Bikes witnessed an increase in gross profit margin in year 7 at 27.4 having risen from 26.6% in the year 6. This is an indicator of the increase in Gross Profit in relation to sales. Year 8 however witnessed a marginal decline in Gross Profit margin which was reported at 27.0%. The 0.4% decline in Gross Profit margin between year 8 and 7 signifies that there was a proportional increase the amount of sales revenue that was taken up by the cost of sales. As a result, it is in order to state that there was a proportional decline of the gross profit by 0.4% of the total sales revenue and an increase in cost of sales by 0.4%.

    Read More

  • SWOT Analysis of the Hospitality Industry in India

    707 Words  | 2 Pages

    2. Demand-supply gap : Indian hotel industry is facing a mismatch between the demand and supply of rooms leading to higher room rates and occupancy levels. With the privilege of hosting Commonwealth Games 2010 there is more demand of rooms in five star hotels. This has led to the rapid expansion of the sector.

    Read More

  • Business Environment of IHG

    2076 Words  | 5 Pages

    Sturman, M., Corgel, J. & Verma, R. (2011). The Cornell School of Hotel Administration on

    Read More

  • Understanding Profitability Ratios: Gross Profit Margin and Return on Capital Employed

    2717 Words  | 6 Pages

    Gross profit margin is a company's total revenue deduct its cost of goods sold divided by total sales revenue and stated as a percentage.[ http://www.investopedia.com/terms/g/grossmargin.asp]

    Read More

More about Analysis Of Room Revenue Per Available Room

Open Document