NOP – Net Operating Profit

What is the meaning / definition of NOP in the hospitality industry?

NOP stands for Net Operating Profit, also known as NOI (Net Operating Income). It is a KPI / calculation of net operating income / profit after subtracting all of the operating expenses from the revenues generated by a hotel.

Basically speaking, net operating profit refers to the amount of money that a hotel has earned after the cost of distribution and operating expenses have been deducted. This is used to see whether a hotel is making more than it spends or is operating at a loss.

It is used to examine the cash flow of an investment before the effects of taxes and financing costs are considered. This performance indicator is often a crucial figure for investors as part of their estimation of the value of the property.

How do you calculate NOP?

NOP Formula: Revenue generated โ€“ Operating Expences

See Also:

Synonyms

  • NOP
  • Net Operating Profit

Subscribe to our free newsletter

Enjoy the latest trends shaping the hotel industry.

*By subscribing, you agree to receive communications from Xotels as perย ourย Terms & Conditions.

NEW HOTEL SALES CHANNEL

WIWT sells hotel rooms via Social Media.

Share This Story, Choose Your Platform!

About the Author:

As CEO and Founder of XOTELS, Patrick Landman has made it his mission to turn hotels and resorts into local market leaders. XOTELSยด diverse expertise and deep-knowledge across revenue management consulting, hotel management, and hotel consulting, enables us to drive results for independent boutique hotels, luxury resorts, and innovative lodging concepts. Below you will find opinion articles written by Patrick Landman.