Pearson New International Edition International pcl tp indd 1

FRONT OFFICE SEMANTICS
GoPar (gross operating profit per available room):
Average gross profit (revenue less management-
controllable expenses) generated by each guestroom during a given time period. The GoPar formula for
a given time period is
Revenue 
⫺
Management-controllable expenses 
⫼
Available rooms for that period
Because this book is about professional front office management, RevPar pricing
is relevant. RevPar pricing involves variables that are within the control of FOMs;
that is, at least, FOMs can manage, compute, and monitor RevPar-related data. By
contrast, GoPar calculations are affected by everything from the hotel’s utility use to
fixed costs to banquet costs. As a result, the information required to measure GoPar
might not be readily available to FOMs. Even if the data were available, FOMs are
less able to significantly influence these data than RevPar variables.
Whether GoPar will replace RevPar as the standard measure of a hotel’s revenue
management effectiveness is beyond the scope of this discussion. Although some
would argue that GoPar is a better measure of expense management than of revenue-
related decision making, the fact remains that room demand forecasts should affect
pricing decisions made by the FOM.
Let’s assume that an FOM in a 500-room property forecasts that for a Sunday
two weeks away, the hotel’s likely occupancy will be 25 percent or less. At one time
there was little the FOM could do to directly address this situation. Changing
(reducing) room prices or increasing the value of room discounts for that day was not
possible, because most of a hotel’s room pricing information was distributed to buy-
ers by print media (e.g., brochures and ads in industry directories) that required a
long lead time and could not be changed rapidly. The FOM might assume that a
reduced price would increase the sale of rooms, but there was no effective way to
inform travelers or travel buyers about the reduced rates. Only guests who contacted
the hotel directly, typically by calling the front desk, could be informed about reduced
rates. The number of guests who would be willing buyers at the reduced rates would
likely be high but many would likely have been willing to buy at the hotel’s original
(nondiscounted) printed and published rates.
Today, the world of hotel sales is completely different from the sales environ-
ment at the beginning of the new millennium. An FOM can now change room rates