UNIFORM

SYSTEM OF
ACCOUNTS FOR
THE LODGING
INDUSTRY

USALI
• THE USALI IS AN IMPORTANT
GUIDE WIDELY USED
INTERNATIONALLY AS A
STANDARD FOR FINANCIAL AND
OPERATIONAL REPORTING.
• ITS PRIMARY PURPOSE IS TO
OFFER OPERATING STATEMENTS
FORMATTED TO PROVIDE
HOTEL OWNERS, MANAGERS
AND OTHER INTERESTED
PARTIES WITH OPERATIONAL
INFORMATION PERTINENT TO
THE LODGING INDUSTRY.
• THE USALI WAS FIRST PUBLISHED
IN 1926.
 WHO IS RESPONSIBLE

HOTEL ASSOCIATION OF NEW YORK CITY

OWNS COPYRIGHT
AMERICAN HOTEL & LODGING EDUCATION INSTITUTE
PUBLISHER
HOSPITALITY FINANCIAL TECHNOLOGY PROFESSIONALS
SPONSOR
AH&LA FINANCIAL MANAGEMENT COMMITTEE
AUTHOR
26 TO 30 MEMBERS, INDUSTRY CONSTITUENTS
 UNIFORM SYSTEM OF ACCOUNTS FOR THE LODGING INDUSTRY

1. HISTORY
2. PURPOSE
3. BENCHMARKING
4. APPLICATION
5. ACCOUNTING PRINCIPLES AND TERMINOLOGY
 • ABOUT HFTP
• HOSPITALITY FINANCIAL AND TECHNOLOGY PROFESSIONALS (HFTP®)
ESTABLISHED IN 1952, IS AN INTERNATIONAL, NONPROFIT ASSOCIATION,
HEADQUARTERED IN AUSTIN, TEXAS, USA, WITH OFFICES IN THE UNITED
KINGDOM, NETHERLANDS AND DUBAI.
• HFTP IS RECOGNIZED AS THE SPOKES GROUP FOR THE FINANCE AND
TECHNOLOGY SEGMENTS OF THE HOSPITALITY INDUSTRY WITH
MEMBERS AND STAKEHOLDERS SPANNING ACROSS THE GLOBE.
• HFTP UNIQUELY UNDERSTANDS THE INDUSTRY'S PRESSING ISSUES AND
ASSISTS ITS STAKEHOLDERS IN FINDING SOLUTIONS TO THEIR CHALLENGES
MORE EFFICIENTLY THAN ANY ORGANIZATION. IT DOES THIS VIA ITS EXPERT
NETWORKS, RESEARCH, CERTIFICATION PROGRAMS, INFORMATION
RESOURCES AND CONFERENCES/EVENTS SUCH AS HITEC.
• HFTP ALSO OWNS THE WORLD'S ONLY HOSPITALITY-SPECIFIC SEARCH
ENGINE, PINEAPPLESEARCH.COM. FOR MORE INFORMATION ABOUT HFTP,
VISIT THE HFTP WEBSITE.
 2. PURPOSE

To guide the
Preparation and Provide Operating
Presentation of Statements (as opposed to
Management income statements)
information

Formatted to provide
Pertinent to the unique
Owners, Operators, and
operating environment of
interested parties with
the Lodging Industry
information and data
 3. BENCHMARKING

• USALI IS THE BASE FORMAT USED IN ALL PUBLISHED INDUSTRY AVERAGE

OPERATING DATA (PKF, STR**, HVS) THROUGHOUT NORTH AMERICA AND
OTHER JURIDICTIONS
• COMPARISON OF FINANCIAL AND/OR OPERATIONAL PERFORMANCE AGAINST
INDUSTRY AVERAGES OR A COMPARABLE GROUP OR TYPE OF PROPERTIES
• COMPARISON OF CURRENT FINANCIAL AND/OR OPERATIONAL PERFORMANCE
AGAINST PRIOR PERIODS OR BUDGETS
 4. APPLICATION

• USALI IS GENERALLY CONSIDERED TO HAVE GLOBAL APPLICATION

• USED INTERNATIONALLY BY MOST OF THE LARGE (NORTH AMERICAN, EUROPEAN, UK, BASED) HOTEL
COMPANIES
• RECOGNIZED BY PUBLIC MARKET ANALYSTS (NEW YORK, LONDON, TORONTO) WHEN ASSESSING
EARNINGS AND ESTIMATES
• 11TH REVISED EDITION OF USALI TERMINOLOGY IS LESS US CENTRIC AND FOCUSED ON GLOBAL
APPLICATION
• CONSISTENT WITH ACCOUNTING PRINCIPLES GENERALLY
ACCEPTED IN THE UNITED STATES OF AMERICA (US GAAP) 5.
• REFERENCED IN MANY INDUSTRY, AGREEMENTS, ACCOUNTIN
CONTRACTS, AND DOCUMENT (MANAGEMENT, G
FRANCHISE, LOAN DOCUMENTS, ETC.)
• TERMINOLOGY UNIQUE OPERATING ENVIRONMENT OF
PRINCIPLES
THE LODGING INDUSTRY IS FOCUSED ON GLOBAL AND
APPLICATION (LESS US CENTRIC TERMINOLO
GY
• THE REVISED USALI CONTAINS STATEMENTS FOR INTERNAL AND EXTERNAL USERS.
• THE FINANCIAL STATEMENTS PRIMARILY FOR EXTERNAL USERS (BANKERS, CREDITORS, ETC.) COMPLY
WITH US GAAP.
• THE STATEMENTS WITH INTERNAL INTEREST CONSIST OF OPERATING STATEMENTS FOR BOTH
OPERATORS AND OWNERS.
• IN ADDITION, 14 SUPPORTING SCHEDULES ARE PROVIDED, AS WELL AS SUB-SCHEDULES.
•
• A FORMAT USEFUL FOR ANALYTICAL USERS SUCH AS MANAGERS
OPERATING THE PROPERTY, ASSET MANAGERS, AND SIMILARLY
INVOLVED PARTIES IS PRESENTED AS THE SUMMARY OPERATING
STATEMENT, A SAMPLE IS PRESENTED IN THE FOLLOWING FILES.
OPERATING/
STATEMENT/
FOR/
OWNERS
OPERATING/
STATEMENT/
FOR/
MANAGERS-
OPERATORS
 GROUP DISCUSSION

• IN GROUP DISCUSS WHAT IS DIFFERENCE BETWEEN USALI FOR MANAGER AND

OWNER AND WHY?
OPERATING
STATEMENT

• THE OPERATING STATEMENT STARTS

BY SHOWING THE HOTEL INCOME BY
ITS MOST IMPORTANT BUSINESS
SOURCES

EXAMPLE:

• ROOMS

• FOOD AND BEVERAGE

• OTHER OPERATED DEPARTMENTS

∙ E.G.: GOLF COURSE AND PRO SHOP

∙ E.G.: HEALTH CLUB/SPA

∙ E.G.: PARKING
 OPERATING STATEMENT

MISCELLANEOUS IS INCLUDING:
• ATTRITION FEES – E.G.: FEES RECEIVED FROM GROUPS WHICH HAVE DECREASED THEIR BOOKINGS VERSUS THE
ORIGINAL RESERVATION
• CANCELLATION FEES – E.G.: FEES RECEIVED FROM GROUPS THAT HAVE CANCELLED THEIR RESERVATION
• CASH DISCOUNTS EARNED, E.G.: OBTAINED DISCOUNTS BY THE HOTEL DUE TO THE TIMELY PAYMENT WITHIN
THE DISCOUNT PERIOD, E.G.: TO A SUPPLIER
• COMMISSIONS RECEIVED FROM THIRD PARTIES FOR SERVICES, E.G.: LEASED GAMING AND VENDING
MACHINES
• GUEST-RELATED FOREIGN CURRENCY TRANSACTIONS, BOTH GAINS AND LOSES
 MISCELLANEOUS

• INTEREST INCOME EARNED ON CASH INVESTMENTS, BANK DEPOSITS, NOTES RECEIVABLE, ACCOUNTS RECEIVABLE
RELATED TO THE OPERATING ACTIVITIES OF THE FACILITY. INTEREST EARNED FROM CAPITAL RESERVE ACCOUNTS
AND ANY RESTRICTED FUNDS ACCOUNTS ARE REPORTED IN NON-OPERATING INCOME AND EXPENSES PART
• NET INCOME FROM RENTING MIXED-OWNERSHIP UNITS

• RESORT FEES – MANDATORY FEES CHARGED PER ROOM NIGHT, WHICH ALLOW GUESTS TO USE SERVICES SUCH AS
FITNESS FACILITIES, SPA, POOL, LOCAL CALLS, INTERNET, AIRPORT TRANSPORTATION, ETC...
• SPACE RENTAL AND CONCESSIONS

• OTHER – E.G.: CHARGES FOR A SAFETY DEPOSIT BOXES

 DEPARTMENTAL EXPENSES

• EACH OF THE MENTIONED DEPARTMENTS HAVE THEIR OWN OPERATING INCOME AND
DEPARTMENTAL EXPENSES – E.G.: COST OF SALES – WHEN IT OCCURS IN A SPECIFIC
DEPARTMENT, LABOUR COST

• THESE EXPENSES COULD BE EASILY ASSIGNED TO A SPECIFIC DEPARTMENT – E. G. FOOD

COST IS ASSIGNED ONLY TO FOOD & BEVERAGE DEPARTMENT. OTHER EXPENSES LIKE
LABOUR COST COULD OCCUR IN MANY DEPARTMENTS
 TOTAL DEPARTMENTAL PROFIT

• THE DIFFERENCE BETWEEN THE OPERATING INCOME AND THE DEPARTMENTAL EXPENSES
IS THE DEPARTMENTAL PROFIT. ITS RELATIVE MEASURE (%) ALLOWS FOR COMPARISON,
AND EVALUATION OF EFFECTIVENESS OF A SPECIFIC HOTEL’S DEPARTMENT.

• BELOW THE TOTAL DEPARTMENTAL PROFIT (THE SUM OF ALL DEPARTMENTAL PROFITS)
ARE LISTED THE UNDISTRIBUTED OPERATING EXPENSES.
 UNDISTRIBUTED OPERATING EXPENSES

THE UNDISTRIBUTED OPERATING EXPENSES ARE GROUPED PER THE FOLLOWING DEPARTMENTS:
• ADMINISTRATIVE & GENERAL
• INFORMATION & TELECOMMUNICATIONS SYSTEMS
• SALES & MARKETING
• PROPERTY OPERATIONS & MAINTENANCE
• UTILITIES
 GROSS OPERATING PROFIT (GOP)

• TOTAL DEPARTMENTAL PROFIT MINUS UNDISTRIBUTED OPERATING EXPENSES EQUALS

GROSS OPERATING PROFIT (GOP). THIS IS THE MAIN MARGIN TO MEASURE THE HOTEL
MANAGEMENT, HOW WELL IT IS OPERATING A HOTEL.
 MANAGEMENT FEES

• BELOW THE GOP WE ALLOCATE THE MANAGEMENT FEES – TYPICALLY A BASE

MANAGEMENT FEE AND INCENTIVE MANAGEMENT FEES.

• BELOW THE MANAGEMENT FEES ARE LISTED NON-OPERATING INCOME AND EXPENSES
WHICH ARE NOT RELATED TO DIRECT HOTEL’S OPERATIONS.
 NON-OPERATING INCOME AND EXPENSES

THE NON-OPERATING INCOME

∙ COST RECOVERY INCOME (INCOME COLLECTED FROM THIRD PARTIES FOR RECOVERY OF
COMMON AREA MAINTENANCE)

∙ INTEREST INCOME GAINED FROM FUNDS DEPOSITED IN RESERVE OR RESTRICTED

ACCOUNTS

∙ OTHER INCOME (INCOME NOT ASSOCIATED WITH HOTEL OPERATIONS OR MANAGED BY

OPERATOR)
 EXPENSES

∙ RENT

∙ PROPERTY AND OTHER TAXES (MAINLY LAND ALLOTMENT TAX AND REAL ESTATE
PROPERTY TAX)

∙ INSURANCE (BUILDING, LIABILITY AND DEDUCTIBLE)

∙ OTHER (COST RECOVERY EXPENSE, GAIN/LOSS ON FIXED ASSETS, OWNER EXPENSES,

UNREALIZED FOREIGN EXCHANGE GAINS OR LOSSES)
 EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND
AMORTIZATION (EBITDA)

• SUBTRACTING THE ABOVE MENTIONED INCOME AND EXPENSES FROM THE GOP ONE GETS
THE EBITDA, WHICH STANDS FOR “EARNINGS BEFORE INTEREST, TAX, AND DEPRECIATION
& AMORTIZATION.
 REPLACEMENT RESERVES FOR FURNITURE, FIXTURE AND
EQUIPMENT (FFE)

• HOTEL OPERATORS END UP THE OPERATING STATEMENT WITH REPLACEMENT RESERVE.

THIS RESERVE IS A SPECIAL FUND FOR FUTURE FURNITURE, FIXTURE AND EQUIPMENT

EXPENSES WHICH ARE DEEMED NEEDED TO UPHOLD ANY BRAND RELATED STANDARDS.
 NON-OPERATING PROPERTY OWNER EXPENSES

FROM THE EBTDA DOWN, ANY EXPENSE CONSIDERED IS TO BE DECIDED BY THE HOTEL OWNING COMPANY, IN

LINE WITH ITS INVESTMENT STRATEGY AND LOCAL LEGISLATION.

COST TO BE CONSIDERED ARE:

INTEREST

DEPRECIATION

AMORTIZATION