Net profit

→ Go! Category:Hotel info
→ Go! Running competition

What is net profit?

The net profit consists of the revenues which are made in the four revenue groups:

• Rooms rental
• Food and beverage
• Banqueting
• Other revenues

Minus the total of the costs.
We only speak of net profit, not of margin, profit or other concepts. We do not look at any corporate tax at all.
There is a special group fines and bonuses which influences the result directly.
What remains is the net profit. More info on the page Operating review. As you take over this profit is good, in fact to good. This is caused by the fact that the management who ran the hotel really did as few spendings as possible during the last few years. This has driven up the net profit, but now there is a real arrears in maintenance and the visitors are getting dissatisfied by the fact that the hotel is outdated.

Net profit visualized in Dashboard

Limitations

In the simulations you do not have to worry about taxes or VAT (value added tax)
You also do not have to worry about liquidity: it is all about the net profit sot here is no profit before or after tax. Of course, this is a limitation in this game, do not forget to take care of this in reality. The regulation differ from country to country.

More on profit

Ar you take over your hotel will probably make more costs [[decisions 6 till 10) then have been made in the past.
Compensating for the extra costs or benefiting from them can only be done in a few ways:
- More revenues by choosing higher prices, so a higher profit per sold product;
- More revenues by achieving a higher occupancy-rate, so more sales.
- Make less costs per room as you have a higher occupancy rate;
- Make costs hoping that -by making them- other costs are brought down (for instance, in using ICT, less staff is needed);

All the fixed costs can not be influenced at all. The variable costs will automatically be calculated related to your occupancy rate.
There are also pages on the revenues per room: RevPOR and RevPAR.
To get a basic idea on what the average profit is per room or per occupied room we use a ratio called Revenue per room.

---

→ GO! Top of this page

Emerald Forest Hotel offering an emerald hotel experience! | Run your own hotel in this management simulation.