What is Gross Revenue?
The total income generated by a property from all revenue sources before deducting any expenses, including room revenue, amenities, and other income streams.
Understanding Gross Revenue
Primary revenue sources for outdoor hospitality properties typically include:
- Room or site rental revenue (the main income source)
- Amenity fees (pool access, activities, equipment rentals)
- Retail sales (camp store, firewood, supplies)
- Food and beverage revenue (if applicable)
- Storage fees (RV storage, boat storage)
- Event or group booking revenue
- Other miscellaneous income
Gross revenue is calculated by summing all income from these sources over a specific period (monthly, quarterly, or annually). For example, a glamping resort might generate $800,000 in room revenue, $50,000 in amenity fees, $30,000 in retail sales, and $20,000 in other income, resulting in $900,000 in gross revenue.
Understanding gross revenue is fundamental to financial analysis and property valuation. It's the starting point for calculating profitability metrics like Net Operating Income (NOI), operating margins, and various return metrics.
Gross revenue is used in multiple financial calculations:
- Operating margin = (Gross Revenue - Operating Expenses) ÷ Gross Revenue
- NOI = Gross Revenue - Operating Expenses
- Revenue per available unit (RevPAR) calculations
- Cap rate and property valuation
For outdoor hospitality properties, gross revenue can vary significantly based on seasonality, occupancy rates, average daily rates (ADR), and the mix of revenue sources. Properties with diverse revenue streams may have more stable gross revenue than those relying solely on room revenue.
In feasibility studies and appraisals, gross revenue projections are critical for assessing property value and investment potential. Accurate revenue forecasting requires understanding market demand, competitive positioning, pricing strategies, and seasonal patterns.
Sage Outdoor Advisory includes detailed gross revenue analysis in our feasibility studies and appraisals, helping clients understand income potential, revenue diversification opportunities, and financial performance expectations.
Examples of Gross Revenue
- •A glamping resort generates $750K in room revenue from 20 units, $45K from amenity fees (activities, equipment rentals), $25K from camp store sales, and $15K from event bookings. Total gross revenue = $835K annually. This comprehensive revenue picture helps owners understand total income potential beyond just room rates.
- •An RV park with 100 sites generates $720K from site rentals, $85K from storage fees (winter storage, boat storage), $40K from camp store, $30K from laundry facilities, and $15K from other services. Gross revenue = $890K. The diverse revenue streams provide stability and additional income beyond basic site rentals.
- •A campground's gross revenue breakdown: $420K from site rentals (50 sites), $18K from firewood and supplies, $12K from activity fees, and $8K from group bookings. Total gross revenue = $458K. Understanding this total revenue helps with financial planning and identifying opportunities to increase income.
Common Use Cases
- •Financial planning and budgeting
- •Property valuation and appraisal
- •Revenue optimization and diversification
- •Investment analysis and feasibility studies
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Frequently Asked Questions About Gross Revenue
What's included in gross revenue for outdoor hospitality properties?
Gross revenue includes all income sources: room/site rental revenue, amenity fees, retail sales, food and beverage (if applicable), storage fees, event revenue, and any other miscellaneous income. It represents total income before any expenses are deducted.
How does gross revenue differ from net revenue?
Gross revenue is total income before expenses. Net revenue (or Net Operating Income) is gross revenue minus operating expenses. Gross revenue shows total income potential, while net revenue shows profitability after operating costs.
Why is gross revenue important?
Gross revenue is the foundation for financial analysis, property valuation, and investment decisions. It's used to calculate profitability metrics, operating margins, and property values. Understanding gross revenue helps owners identify revenue opportunities and assess financial performance.
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