Monday morning. 8 am. The weekly trading report lands in your inbox.
Occupancy. ADR. RevPAR. Channel mix. Cancellations. You scan the numbers as you have hundreds of times. You know immediately which figures are strong and which need attention. You know what the weekend did versus last year, versus budget, versus your comp set.
Your marketing agency gets the same report. Or a version of it. And here is the uncomfortable truth I learned both as a GM receiving agency reports and as an agency founder reviewing what other agencies produce for hotel clients.
Most marketing agencies look at the top line. They see occupancy and RevPAR, and they build their strategy around those numbers. They talk about driving more bookings, increasing traffic, and improving click-through rates.
What they are not looking at is the middle of your P&L: the distribution costs. The channel mix that tells you not just how many bookings you took, but what each of those bookings actually cost you. The difference between what your revenue report says you earned and what your bank account says you kept.
That gap is where the real hotel marketing strategy lives. And most agencies never go near it.
The P&L That Most Marketing Agencies Never See
Let me describe the P&L of an upper four-star independent hotel, because I spent seventeen years managing exactly that kind of property within Bespoke Hotels, the UK’s largest independent hotel group.
The top line is room revenue. Gross, before anything is deducted. Your marketing agency sees this number and understands it. It is the headline figure. RevPAR is derived from it. It is what everyone talks about in the morning meeting.
Then comes the middle of the P&L. This is where the real management happens, and where the real money is either protected or lost.
Your payroll is your highest cost. In an upper four-star hotel, it typically runs at 30 to 35% of total revenue, depending on your service model, F&B provision, and seasonality. It is largely fixed in the sense that you cannot fundamentally change it without changing your product. You can manage it at the margins. You cannot transform it overnight.
Your energy costs, your food and beverage costs, your linen and laundry, your maintenance, your insurance, your property rates. These are all relatively fixed or tied to commodity markets you do not control.
Then there is the section of the P&L that is neither entirely fixed nor entirely at the mercy of the market. The distribution costs. The marketing spend. The OTA commission. The channel mix decisions that determine how much of your room revenue you actually keep.
This is the lever I became obsessed with as a GM. Not because it was the largest line on the P&L, but because it was the most controllable one. Every percentage point of OTA commission I could reduce, every booking I could shift from a 20% commission channel to a direct booking at 3% acquisition cost, dropped almost entirely to my net profit line with no associated operational cost.
In an upper four-star hotel running 150 rooms at an average rate of £160 per night and 72% occupancy, room revenue is approximately £6.3 million annually. At 45% OTA mix and 18% commission, that is £510,000 per year in third-party distribution costs. A 10-percentage-point shift to direct, holding everything else equal, saves £113,000, dropping straight to net profit. No food costs. No extra labour. No energy consumption. Pure bottom-line improvement.
That is what a well-executed marketing strategy should be targeting. Not just bookings. Not just traffic. Net revenue improvement through channel shift.
RevPAR: What It Tells You and What It Deliberately Hides
RevPAR, Revenue Per Available Room, is the metric the hotel industry uses to measure room revenue performance. It is calculated by multiplying your occupancy rate by your average daily rate, or equivalently by dividing total room revenue by total rooms available.
It is a genuinely useful metric. It combines the two key room performance variables, rate and occupancy, into a single figure. It allows meaningful comparison with your comp set through STR or your own benchmarking data. It is the number that goes into your monthly owner report and your board pack.
But RevPAR has a structural limitation that most marketing agencies do not understand and almost none of them address.
RevPAR is a gross revenue metric. It tells you nothing about what any of those bookings cost you to acquire.
A hotel with RevPAR of £90 from 60% of bookings through OTAs at 18% commission has a very different financial reality from a hotel with the same RevPAR from 30% OTA mix. The first hotel is paying approximately £16.20 of that £90 to a third party. The second is paying approximately £8.10. Their RevPAR is identical. Their net revenue per available room differs significantly. Their GOPPAR will clearly reflect that difference.
When your marketing agency reports that its campaign has improved your RevPAR, it may be telling you both the truth and something incomplete at the same time. If the RevPAR improvement came through increased OTA volume, the net impact on your profitability is significantly less than the headline suggests. If it came through direct booking growth, the net impact is substantially better than RevPAR alone would indicate.
Ask your agency which channel drove the RevPAR improvement. If they cannot tell you, they are working with an incomplete picture of your business.
GOPPAR: The Number That Tells the Truth
GOPPAR, Gross Operating Profit Per Available Room, is the metric that separates genuine operational performance from headline vanity.
It is calculated by taking your total gross operating profit, revenue minus all operating expenses, including payroll, cost of goods, energy, maintenance, distribution costs, and marketing, and dividing it by your total rooms available.
GOPPAR is what a hotel actually earns. Not what it takes in before expenses. What is kept after running the operation?
The strongest hotel operators in 2026 are shifting their focus from RevPAR to GOPPAR precisely because the post-pandemic revenue environment has changed. Global RevPAR for independent hotels declined in 2025. OTA share of independent hotel bookings rose to 63.4%. Labour costs now represent up to 60% of operating expenses in some markets. In that environment, growing RevPAR while GOPPAR stagnates or declines is not an achievement. It is a treadmill.
Here is the scenario that illustrates why GOPPAR matters more than RevPAR for marketing strategy.
Hotel A increases RevPAR by 8% year-on-year through aggressive OTA promotional participation. Genius programme, Preferred Partner status, promotional rate discounts. Volume increases. Revenue increases. But commission costs increase proportionally, OTA cancellation rates run at double the direct rate, and rate parity obligations suppress the direct channel. GOPPAR improves by 2%.
Hotel B increases RevPAR by 4% year-on-year through a direct-booking strategy. SEO investment, Google Ads brand protection, email marketing to the guest database, and active GBP management. Volume grows more slowly. Revenue grows more slowly. But channel mix shifts from 50% OTA to 37% OTA over 18 months. Distribution costs fall. Net revenue per booking improves. GOPPAR grows by 9%.
Hotel A looks better in the trading report. Hotel B has better business.
Your marketing agency should be optimising for Hotel B’s trajectory, not Hotel A’s. If they are not talking to you about GOPPAR and channel cost, they are optimising for the wrong metric.
Reading Your Channel Report Like a GM, Not a Marketer
Your channel report shows you where your bookings came from. Booking.com. Expedia. Direct website. Phone. Travel agent. Corporate account. GDS. Walk-in.
Most GMs read this report as a volume story. How many bookings from each channel, what percentage of total, how that compares to last month and last year.
The more valuable way to read it is as a cost story. For each channel, what is the effective acquisition cost as a percentage of booking value? And what is the net revenue per booking after that cost is deducted?
Here is a simplified version of what that analysis looks like for a typical upper four-star independent hotel.
A direct website booking at an average room rate of £160 costs approximately £5 to £8 to acquire through a well-managed SEO and Google Ads programme. Net revenue: approximately £153.
A Booking.com booking at the same rate costs £28.80 in commission at 18%. Net revenue: approximately £131.
A Genius programme Booking.com booking with a 15% promotional discount applied costs commission on the discounted rate, plus the discount itself. Effective rate £136. Commission £24.48. Net revenue: approximately £111.
A GDS corporate booking through a travel management company incurs a GDS fee of typically £10-£18, plus any agency commission. Net revenue: approximately £135 to £145, depending on the specific arrangement.
A phone booking converted by your reservations team costs the proportion of the reservations team’s salary attributable to that call, typically £3 to £6 for a clean conversion. Net revenue: approximately £154.
Reading your channel report through this lens completely changes the conversation. The channel that looks most productive on a volume basis is often not the most profitable on a net revenue basis. And the channel mix that your marketing agency should be optimising toward is the one that maximises net revenue, not bookings volume.
The Middle of the P&L: Where the Real Management Happens
In upper four-star hotel management, your attention moves quickly beyond room revenue to the full operating account. You are not just running a bedroom business. You are running a restaurant, possibly multiple restaurants. A bar. A spa if you are a leisure or destination property. Conference and event facilities. Possibly a leisure club. A retail operation in some cases.
Each of these revenue streams has its own cost structure, its own margin profile, and its own contribution to GOPPAR. And each of them interacts with your rooms business in ways that affect your overall P&L performance in ways that RevPAR alone completely misses.
A conference and events booking that fills 40 rooms midweek at a discounted residential delegate rate, with full catering included, may produce a lower ADR than a comparable leisure booking at full rack rate. But the total contribution to GOP from the delegate rate rooms plus the conference room hire plus the food and beverage plus the bar revenue plus the leisure facilities usage can significantly exceed the leisure booking on a total GOPPAR basis.
A wedding booking that fills your property on what would otherwise be a shoulder weekend, generating rooms revenue plus ceremony and reception hire plus food and beverage for 120 guests plus accommodation for extended family across two nights, changes your weekly GOPPAR picture significantly. The room rate on wedding night is rarely your best ADR of the week. The total contribution to GOP nearly always is.
This is the complexity that marketing agencies without genuine hotel operational experience consistently miss. They look at room bookings as the product. A hotel GM looks at the full operating account and sees room bookings as the entry point to a much larger commercial opportunity.
Your marketing strategy should reflect this. The agency managing your Google Ads should understand that a conference booking enquiry is worth significantly more than a single leisure room booking, and that the ad copy, landing page, and conversion journey for corporate and events traffic should be built around the full value of that enquiry. Not just the room rate.
What Good Looks Like: The P&L Conversation Your Agency Should Be Having With You
When I sit down with a hotel client for the first time, before I talk about search rankings or Google Ads budgets or social media strategy, I ask to see the channel mix report and the operating account.
Not because I need to audit them. Because I need to understand what the business is actually trying to achieve. A hotel owner under pressure on GOP margin has a different priority from one trying to build direct booking volume ahead of a rate increase. A hotel with a strong spa and F&B operation has different marketing priorities from one that is rooms-only. A hotel facing aggressive OTA conquest campaigns on brand terms has a different immediate need from one that has never run Google Ads.
The marketing strategy needs to start with the P&L. Not the traffic report. Not the impressions data. Not the social media follower count.
Here are the questions your marketing agency should be asking you at least quarterly.
What is your current OTA commission as a percentage of room revenue and how does that compare to last year? This single question tells them where the most recoverable margin sits.
What is your GOPPAR trend and where is the biggest pressure coming from? Rising labour costs, rising distribution costs, or declining ADR will each point toward different marketing priorities.
Which revenue departments have the most untapped marketing potential? A hotel with a spa doing 30% of its potential revenue through in-house guests versus external clients has a specific marketing opportunity. A hotel with a private dining room that is half-empty on Tuesday and Wednesday nights has a content and local SEO opportunity. A hotel with a leisure club has a membership and day pass marketing opportunity.
What is your channel cancellation differential? If your OTA bookings are cancelling at 22% and your direct bookings at 11%, every percentage point of channel shift has a double benefit. More net revenue per booking and more revenue certainty in your forward planning.
If your marketing agency is not asking these questions, they are not managing your marketing. They are managing your advertising. The two are not the same thing.
The Marketing Investment That Goes Straight to the Bottom Line
I want to return to the point that drove most of my marketing thinking as a GM, because it is the one that most clearly separates good hotel marketing strategy from average hotel marketing strategy.
When you reduce OTA commissions through a direct-booking strategy, the savings do not go into a revenue line that is then eroded by operating costs. There are no food costs attached to it. No extra housekeeping hours. No energy consumption. No laundry. The reduction in distribution cost falls almost entirely to your GOP.
This is categorically different from a revenue increase driven by higher occupancy or higher rates. A 5% improvement in occupancy at your current ADR generates additional room revenue, which is then partially offset by the incremental cost of servicing those extra rooms. Additional housekeeping time. Additional laundry. Additional amenities. Additional F&B if breakfast is included. The net addition to GOP from a 5% occupancy improvement is typically 50 to 70% of the gross revenue improvement after incremental costs.
A 5% reduction in OTA commission through a direct-booking channel shift delivers its benefits with almost no incremental cost. The same room, the same service, the same cost of operation, retained at higher margin because the acquisition cost was lower.
In an upper four-star hotel environment where owners are scrutinising every margin line and GOP performance is the primary measure of management effectiveness, the channel mix conversation is the most important marketing conversation you can have. The agency that understands this and builds their strategy around it is the one that earns their place in your P&L as an investment rather than a cost.
FAQ
What is the difference between RevPAR and GOPPAR for hotel marketing strategy?
RevPAR measures revenue generated per available room without accounting for any costs. It tells you how well you are selling rooms but not how profitable those sales are. GOPPAR measures gross operating profit per available room after all operating expenses, including distribution costs and marketing spend. A hotel can improve RevPAR by increasing OTA volume while simultaneously worsening GOPPAR if the additional OTA commission and distribution costs exceed the revenue gain. Marketing strategy should be designed to improve both, but GOPPAR is the metric that tells the truth about whether the strategy is commercially successful.
What should a hotel GM look for in their channel report?
Beyond volume by channel, a GM should analyse net revenue per booking by channel after deducting acquisition cost. This means calculating effective OTA commission as a percentage of booking value, comparing it to the cost of direct bookings, and identifying the net revenue differential between channels. The channel producing the most bookings is often not the channel producing the most profitable bookings. Your marketing strategy should be shifting volume toward the channels with the lowest acquisition cost relative to booking value, which in most cases means direct web, direct phone, and repeat guest email.
How does OTA commission affect GOPPAR specifically?
OTA commission is a direct deduction from room revenue before any other costs are applied. At 18% commission on a £160 room rate, £28.80 goes to the OTA before payroll, energy, or any other operating cost is considered. That £28.80 is not partially absorbed by fixed costs. It is a pure reduction in the revenue available to cover your operating costs and generate profit. Shifting the same booking to a direct channel at 4% acquisition cost saves £22.40 per booking with no associated operational cost, dropping directly to GOP. In a hotel doing 20,000 room nights through OTAs annually, that differential represents a very significant GOPPAR opportunity.
Why do most marketing agencies focus on RevPAR rather than GOPPAR?
Because RevPAR is visible, easily reported, and impressive when it grows. GOPPAR requires access to your full operating account, an understanding of distribution cost structures, and the ability to calculate net revenue by channel. Most marketing agencies do not have the operational hotel experience to read a P&L and understand where their work is creating value beyond the top line. An agency that can have a GOPPAR conversation with you is an agency that understands your business. An agency that talks only about traffic, rankings, and RevPAR is an agency that understands advertising.
What is the most controllable line in a hotel P&L?
Distribution costs and channel mix. Payroll is the largest cost but is largely fixed by service model and cannot be fundamentally changed without affecting the product. Energy, food costs, and maintenance are subject to market forces. The channel through which bookings arrive, and therefore the effective cost of acquiring those bookings, is directly within the influence of a well-executed marketing strategy. In an upper four-star hotel, a 10 to 15 percentage point improvement in direct booking mix over 18 months, achieved through SEO, Google Ads, and email marketing investment, typically delivers a net GOPPAR improvement that exceeds the entire marketing programme cost several times over.
How should a hotel evaluate whether a marketing agency is delivering commercial value?
Ask them to show you the impact of their work on net revenue per booking rather than gross booking volume. Ask them to compare the cost per direct booking from their campaigns against the OTA commission rate on equivalent bookings. Ask them what the channel mix trend has been since they started managing your account and what specific activities drove any improvement. An agency that can answer those questions with specific data from your account is delivering commercial value. An agency that can only show you traffic growth and impressions data is delivering activity reports.
The Conversation Webb Marketing Has With Every Hotel Client
Every hotel marketing engagement we take on starts with the same conversation. Not about keywords or ad spend or social media. About the P&L.
We look at the channel mix, the distribution cost structure, and the GOPPAR trend. We identify where the largest recoverable margin sits. We build a marketing strategy around improving that specific metric, not just driving booking volume.
Craig Webb spent seventeen years managing upper four-star hotels within Bespoke Hotels, reading P&L accounts every Monday morning, fighting for every point of GOPPAR improvement, and learning exactly which marketing investments delivered net profit improvement versus which ones just made the RevPAR chart look good.
That operational perspective informs every recommendation we make and every campaign we run for hotel clients. Because the difference between a marketing agency that understands hotels and one that does not is not the quality of their Google Ads. It is whether they can sit across the table from you on a Monday morning and have an intelligent conversation about your trading account.
Book a free strategy call at webbmarketing.info
We will look at your channel mix, your distribution cost structure, and your GOPPAR trend, and give you an honest view of where the commercial opportunity sits.
Craig Webb is the founder of Webb Marketing and spent 17 years as General Manager with Bespoke Hotels, the UK’s largest independent hotel group. His experience spans large corporate conference hotels, boutique luxury properties with spas, leisure and destination hotels with fine dining, and multi-outlet food and beverage operations. Webb Marketing is a Google Verified digital marketing agency specialising in hotel marketing that delivers measurable GOPPAR improvement, not just RevPAR growth.
