- HotStats: Revenue benchmarking no longer enough.
- Hotels valued on operating income, EBITDA and cash flow.
- GOPPAR is the profit equivalent of RevPAR.
REVENUE BENCHMARKING REMAINS central to hotel performance measurement but is no longer sufficient to assess hotel financial performance, according to HotStats. As operating costs rise and hotel operations become more complex, profitability benchmarking is emerging as an additional tool.
RevPAR was not designed to measure profitability, HotStats wrote in its blog post. It reflects room revenue generation, not whether that revenue converts into profit. Hotels with identical RevPAR can report different profits due to variations in costs, operations and departmental margins.
The HotStats blog post distinguishes revenue benchmarking from profitability benchmarking, saying each answers a different business question.
“Revenue benchmarking measures pricing, occupancy and market share, while profitability benchmarking shows whether revenue translates into profit,” the blog said.
The report said comparable financial data is necessary for profitability benchmarking. Hotels often classify expenses differently, with variations in the treatment of resort fees, maintenance, payroll allocations, franchise charges and departmental costs. Self-reported data can therefore produce only approximate comparisons.
Additionally, collecting trial balance data and mapping accounts to the Uniform System of Accounts for the Lodging Industry standardizes reporting of revenues, expenses and departmental allocations across hotels. This enables comparisons across brands, operators and markets and helps identify drivers of profitability.
Looking beyond revenue
Labor costs, F&B margins, distribution expenses and undistributed costs affect profitability without changing RevPAR, HotStats said. The gap is most visible in full-service hotels and resorts, where restaurants, bars, spas, parking and other ancillary operations contribute to both revenue and costs.
Recent industry data underlines the gap. In the first quarter, U.K. hotels increased TRevPAR by 2 percent, while payroll costs rose at nearly twice that rate, reducing operating margins. The data shows revenue growth does not guarantee higher profits when costs rise faster.
In December, HotStats reported that the U.S. hotel industry showed signs of strain after a strong start to 2025, with revenue growth slowing, occupancy falling and profit margins tightening, particularly at unionized properties where labor constraints affected performance.
Meanwhile, GOPPAR is presented as the profit equivalent of RevPAR, HotStats said. It measures operating profit after departmental expenses. TRevPAR measures total property revenue, including rooms, food and beverage, spas, parking and other operating revenue.
Owners and investors typically assess value using net operating income, EBITDA and cash flow rather than room revenue. Profitability benchmarking tracks more than 500 KPIs across rooms, food and beverage, other operated departments and undistributed expenses such as administration and general, sales and marketing, information technology, property operations and maintenance, and energy.
The data also supports comparisons of departmental margins, labor costs, payroll productivity, flow-through, cost per occupied room and other efficiency metrics across comparable hotels.
As hotel operations become more complex and non-room revenue grows, RevPAR alone does not capture the factors determining asset value. Measuring both revenue and profit provides a more complete view of hotel performance.
