GOP Margin Calculator

GOP margin is the health indicator sophisticated hotel owners watch.

Total revenue

Rooms department expense

F&B department expense

Undistributed operating expense

GOP margin

0.4%

Gross operating profit

$10,300,000

Total operating expense

$17,700,000

How the math works

GOP = revenue − (rooms + F&B + undistributed expense). Margin = GOP ÷ revenue.

$28M revenue − $17.7M expense = $10.3M GOP = 36.8% GOP margin (strong select-service territory).

How to Use

Enter total revenue.
Enter rooms department expense.
Enter F&B department expense.
Enter undistributed operating expense.
Read GOP and GOP margin.

Frequently Asked Questions

What's included in GOP?

GOP (Gross Operating Profit) = Total Revenue − Departmental Expenses − Undistributed Operating Expenses. It excludes management fees, insurance, property tax, rent, and debt service. These are 'fixed charges' below the GOP line. GOP measures operational performance isolated from capital structure. It's the line LPs watch most closely because it shows whether the operator is running the property efficiently, regardless of how the deal was financed.

What's a healthy GOP margin?

Urban full-service: 28-35%. Select-service (Hampton, Courtyard): 35-42%. Luxury resort: 32-40%. Economy/extended-stay: 40-50%. Independent boutique: 25-33%. These are STR and HotStats benchmarks. Anything materially below range signals operational slippage — usually labor, F&B, or utilities. Institutional asset managers require monthly GOP variance reporting against budget and comp-set benchmarks.

How do you improve GOP margin?

Labor productivity (wage per occupied room, MPOR — minutes per occupied room), energy management (LED conversion, BMS optimization, demand response programs), F&B cost control (menu engineering, outsourcing to third-party F&B operators, converting F&B to 'grab & go'), channel mix shift (move OTA bookings to direct, reducing commissions from 15-25% to under 5%). Each 100 bps GOP improvement on a $20M revenue hotel is $200k/yr.

Does GOP matter for valuation?

Yes. Hotels trade on multiples of NOI (which is GOP less fixed charges), and NOI is driven by GOP. A 10-point GOP margin uplift on $15M revenue = $1.5M added NOI = ~$15M added value at 10% cap. That's why value-add hotel investors focus so heavily on operations — the cap-rate effect of GOP lift dwarfs the revenue-growth effect over a 3-5 year hold.