GOP (gross operating profit)

GOP (gross operating profit) is the hotel operating result defined by USALI, the Uniform System of Accounts for the Lodging Industry, the reporting standard used by hotel groups and international investors. It is calculated as total revenue, less the direct costs of the operating departments (rooms, food and beverage, other operations), less undistributed operating expenses (administration, sales and marketing, maintenance, energy). It is stated before management fees, owner’s costs (rent, property tax, building insurance), the reserve for furniture, fixtures and equipment (FF&E), depreciation and finance costs.

In the hotel sector

GOP measures the operator’s performance, independently of the ownership structure. It is the reference figure in management agreements: the operator’s incentive fee is often based on it. It is tracked as a margin (GOP to total revenue) and per available room (GOPPAR), alongside RevPAR.

In a transaction

An institutional or foreign investor thinks in USALI terms. Accounts prepared under the French chart of accounts therefore need to be reclassified, then reconciled to EBE through an explicit bridge: management fees, rent, owner’s costs, FF&E reserve. Without that bridge, the buyer compares figures that do not measure the same thing, and the price discussion starts from the wrong base. The reclassification is best prepared with the chartered accountant before the data room opens.

Not to be confused with

EBE is a French accounting measure, close to EBITDA, calculated after rent and after management fees. GOP is a hotel management measure, calculated before them. For the same hotel, GOP is therefore generally higher than EBE, and the gap widens where there is a lease or a management agreement.

For opportunities documented to investment committee standards: institutional investors.