What is the meaning / definition of Net Operating Income in the hospitality industry?
It is an indicator before taxes. It thereby takes into account the operating revenue, meaning the income from the selling of products or services (excluding all extraordinary incomes), minus all the operating expenses, like the inventory, rent, wages, property management fees, insurance, repairs… Though excluded from expenses are: extraordinary expenses, financial expenses (interests).
How to calculate NOI?
Formula: NOI = gross operating income – gross operating expenses