GOP stands for Gross Operating Profit, i.e. a hotel’s gross operating profit. This key figure shows the profit remaining from day-to-day hotel operations after deducting operating costs that can be directly controlled.
Put simply: GOP = operating revenue – operating costs
Operating costs include, for example, staff costs, cost of goods sold, energy, cleaning, maintenance, sales costs and other ongoing operating expenses. Items such as depreciation, interest, taxes or owner costs are not usually included.
GOP is particularly important for hoteliers because it shows whether the hotel business is economically viable in its day-to-day operations. High turnover alone is not very meaningful if costs are rising sharply at the same time. Only the GOP reveals what actually remains of the turnover as operating profit. Put simply, the GOP – Gross Operating Profit – corresponds to the operating profit, often also referred to as Operating Profit I. It shows what remains from day-to-day hotel operations before items such as depreciation, interest, taxes, lease payments, rent or owner costs are taken into account.
This is why the GOP is a key performance indicator in hotel controlling – and far more meaningful than simply looking at occupancy rates or turnover.
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