Accounting In: Hotel Industry =link=

Total Revenue (all departments) $500,000 Less: Total Departmental Expenses ($250,000) = Total Departmental Income $250,000 Less: Undistributed Operating Expenses ($120,000) = Gross Operating Profit (GOP) $130,000 GOP is the key measure of operational efficiency before fixed costs. Gross Operating Profit (GOP) $130,000 Less: Fixed Charges - Property Tax ($15,000) - Insurance ($5,000) - Rent/Lease payments ($10,000) - Depreciation ($20,000) - Interest ($12,000) = Net Income (or House Profit) $68,000 4. Hotel-Specific Key Performance Indicators (KPIs) Standard accounting ratios are insufficient. Hotel accountants track:

| Item | Amount | |------|--------| | Rooms Revenue | $150,000 | | Less: Rooms Expenses | | | - Housekeeping Payroll | $20,000 | | - Laundry & Linen | $5,000 | | - Guest Supplies | $3,000 | | - Reservation System | $2,000 | | | $120,000 | | Departmental Profit Margin | 80% | accounting in hotel industry

Note: Rooms typically have an 70-85% profit margin; F&B is often only 20-35%. Below departmental income, undistributed expenses (A&G, Sales & Marketing, POM, Utilities) are deducted to arrive at GOP . Hotel accountants track: | Item | Amount |