1- The product is perishable a room not tonight sold tonight is lost forever
2- The location and product inventory (rooms) are fixed they cannot be moved as demand patterns change.
3- Entry into the business takes large amounts of capital creating huge fixed costs that necessitate high occupancies to achieve a break-even level of volume.
4- Activity is seasonal with all the adjunct problems of operating an ebb and flow business.
GOP
Gross Operating Profit is the result of Sales minus operating costs that excluding financial charges and exceptional PL items. To obtain the PBT (Profit Before Taxes), we subtract from GOP charges as debt interests, specific restructuring costs and non recurrent expenses and add non-operating income.
