Hotel Profit Margin Calculator
Turn your revenue and expenses into gross, GOP, EBITDA and net margins, and see which costs to work on first.
Four margins every hotel owner should know
Revenue tells you how busy the hotel was. Margins tell you how much of that revenue you kept. This calculator takes your revenue and cost lines for a month or a year and shows four margins, each answering a different question.
- Gross margin: what is left after direct costs of selling, such as food cost, guest amenities, laundry and OTA commission.
- GOP margin: what is left after running the hotel, including payroll, utilities, marketing, admin and repairs. It measures how well the property is operated.
- EBITDA margin: GOP after rent or lease. It shows what the business earns before financing and accounting charges.
- Net profit margin: the final bottom line after interest, depreciation and income tax.
Why the gaps between margins matter
The difference between margins shows where money leaks out. A healthy GOP but a thin net margin points to heavy rent, interest or depreciation: a financing or deal problem rather than an operating one. A weak gross margin points to high commission, food cost or amenity spend. A big drop from gross margin to GOP usually means payroll or utilities are not matched to occupancy.
Getting the numbers right
- Enter revenue without GST, since GST belongs to the government.
- Keep owner drawings out of payroll, and record them separately.
- Use the same period for every line: one month, one quarter or one year.
- Put OTA commission under room direct costs so channel cost is visible.
Using the guidance
The calculator does not compare you with industry benchmarks, because costs differ widely between a leased city hotel, an owner-run homestay and a resort. Instead, it lists your three largest cost lines as a share of revenue and flags common warning signs. Track the same report every month and act on the trend.
For a deeper look, check operating profit per room with the GOPPAR calculator, plan next year with the hotel budget calculator and price your menu with the food cost calculator.
Frequently asked questions
What is the difference between GOP and net profit?
GOP is profit after operating costs such as payroll, utilities and repairs. Net profit also deducts rent, loan interest, depreciation and income tax.
Should I include GST in hotel revenue?
No. Enter revenue excluding GST. GST is collected on behalf of the government and is not income for the hotel.
Where do OTA commissions go?
Put OTA commission in room direct costs. That keeps your distribution cost visible in the gross margin and makes it easier to see the benefit of direct bookings.
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