# How to calculate hotel flow through?

10 Asked By: Dillon Franecki
Date created: Tue, Jun 1, 2021 1:47 AM
Date updated: Fri, Jul 1, 2022 10:27 AM

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## Top best answers to the question «How to calculate hotel flow through»

Flow-through = (Current period revenue - Previous period revenue) / (Current period operating profit - previous period operating profit). The above formula shows Flow-through results between two periods, flow-through can also be calculated on actual results relative to budget.

The way we calculate flow thru is straight forward. The first step is you subtract the revenues from two different periods and step two is to subtract the profit from the same two periods and the thirds step is to divide the difference in revenues by the difference in the profit.

The way we calculate flow thru is straightforward: Step one – Subtract the revenues from two different periods. Step two – Subtract the profit from the same two periods.

Flow tells us how well we controlled costs when revenue is over budget or target. Flex tells us how well we controlled costs when revenue is under budget or target. We can calculate this simply by taking profit variance divided by revenue variance. An example will illustrate how this works. Let’s assume the following: Flow Situation

Once you have calculated the GOP difference, divide that by the total revenue difference and you will have your flow ratio. For example, if your hotel’s actual total revenue exceeds budget by \$10,000 and your GOP exceeds budget by \$5,000, your hotel flowed 50% (5,000/10,000). Flex is just the opposite. Your hotel is in a flex position if you have ...

Flow-Through. The Flow-Through calculator computes the Flow-Through associated with a business' ability to cause more revenue to equate to more operating profits. INSTRUCTIONS: Choose the preferred currencies and enter the following: ( GOPT) This is the Gross Operating Profits from this year. ( GOPL) This is the Gross Operating Profits from last ...

Negative flow in F&B is often the saving grace when revenues in your hotel go backward. Minor operating departments and store rents both make up part of the overall flow thru analysis. Depending upon the nature of your MOD’s you should be able to reel in savings when revenues drop.

Flow-through analysis is expressed as a ratio of gross operating profit to revenue that exceeds budget, according to the hospitality software provider, Aptech-Inc. For example, according to Aptech, if a property earns \$100,000 revenue over and above budget, and the gross operating profit is \$70,000 over budget, then the flow-through rate is 70 percent (in other words, 70,000 divided by 100,000).

The way we calculate flow thru is straight forward. The first step is you subtract the revenues from two different periods and step two is to subtract the profit from the same two periods and the...

It’s much easier calculate the variances or calculate percentages which will make it easier for you to review. Step 2 – Calculate necessary variances and supporting ratios The second step is to calculate the variance columns because some standard hotel accounting software doesn’t give the variances column and a few of them just give variance vs budget and don’t compare to the previous year.