The short answer
The bridge between your hotel's daily operations and the money you receive is the USALI Summary Operating Statement. It rolls departmental schedules (rooms, food & beverage, other operated departments) up through undistributed expenses to Gross Operating Profit, then through management fees and non-operating items to EBITDA and the owner result. Once you read GOPPAR against that P&L, you can translate every occupancy, pricing and labor decision into owner-level cash flow.
Key takeaways
- USALI is the language of your hotel management agreement: operator reports, incentive fees and market benchmarks are almost always calculated 'in accordance with the Uniform System', so owners need to understand its logic.
- The single most important structural boundary is between direct departmental costs and undistributed operating expenses; miscoding a cost across that line distorts GOP and breaks comparability with benchmarks.
- Per-available-room metrics (RevPAR, TRevPAR, GOPPAR) normalize results so hotels of different sizes can be compared and revenue growth can be separated from genuine profit growth.
- The 12th Revised Edition, effective January 1, 2026, adds owner-facing transparency: discrete loyalty program costs, an executive lounge schedule, FTE reporting and a consolidated brand-and-operator cost schedule.
- GOP measures what unit management directly controls, while EBITDA and the owner result include management fees and non-operating items — do not mix these levels when evaluating performance.
- A sound monthly review checks per-available-room metrics against budget and prior year, tracks labor as a percentage of departmental revenue, and calculates flow-through into GOP.
Why the owner must speak USALI
The Uniform System of Accounts for the Lodging Industry (USALI) is a standardized accounting framework for hotels, first introduced by the American Hotel & Lodging Association in 1926 and refined ever since to reflect new revenue streams and accounting practice. Its purpose is to give hotels a consistent way to track financial performance so results can be compared across properties, brands and geographies. In practice, USALI has become the language spoken between operators and owners: most hotel management agreements (HMAs) contain a clause making USALI the only permitted accounting and reporting methodology.
For an owner who does not run the day-to-day operation, USALI knowledge is a control tool rather than a bookkeeping nicety. Without understanding how the Summary Operating Statement is built, you cannot verify how fees are computed, separate operator-controlled costs from owner costs, or benchmark your property against a competitive set. Every periodic revision of the standard adds requirements that change the numbers you will see in the monthly reporting package, so owners should stay current rather than inherit an outdated format.
- USALI first published in 1926 by the American Hotel & Lodging Association
- 12th Revised Edition produced by HFTP's Global Finance Committee with AHLA and HFTP sponsorship
- Most HMAs name USALI as the sole accounting and reporting methodology
Anatomy of the Summary Operating Statement
The heart of USALI is the Summary Operating Statement, which rolls up a set of supporting departmental schedules into one standardized view. The statement is built on responsibility accounting: operated (revenue-generating) departments — rooms, food & beverage and other operated departments such as spa, parking or retail — each show their own revenue, cost of sales, labor and direct expenses. The result per department is departmental profit.
Below those sit undistributed operating expenses: administrative and general, sales and marketing, property operations and maintenance, information technology, and utilities/energy. Because these support the whole property they cannot be charged to a single revenue center. Deducting total undistributed expenses from total departmental profit yields Gross Operating Profit (GOP) — the key measure under management control and the usual basis for incentive fees. Management fees, then non-operating income and expense (rent, interest, insurance, property taxes, depreciation), lead to EBITDA and the owner-level result, followed by the replacement reserve.
- Operated departments: Rooms, F&B, other operated departments
- Undistributed operating expenses: A&G, marketing, POM, IT, energy/water/waste
- GOP = total departmental profit − undistributed operating expenses
- Then: management fees → non-operating items → EBITDA → owner result / replacement reserve
Operational metrics that pair with the P&L
A USALI P&L is only half the story without the operating statistics that give the numbers context. Occupancy, average daily rate (ADR) and revenue per available room (RevPAR) explain how the rooms revenue line was built. But RevPAR reflects only the rooms department, so for a full-service hotel you also want total revenue per available room (TRevPAR) across all outlets, and finally gross operating profit per available room (GOPPAR).
The practical value of per-available-room measures is normalization: they let you compare a 150-room property with a 300-room one and against market comps such as STR data. GOPPAR is where operations and owner money meet — it shows how much the operating system actually earns on each available room before fees and non-operating items. Benchmark carefully: a per-night figure computed against the daily inventory of available rooms is more reliable than a blunt monthly average that ignores closed or out-of-service rooms. Track these together: GOPPAR tells you profit efficiency, while occupancy, ADR and RevPAR tell you how that profit was achieved.
- RevPAR = rooms revenue / available rooms
- TRevPAR = total hotel revenue / available rooms
- GOPPAR = GOP / available rooms
- Read GOPPAR alongside occupancy, ADR and RevPAR, not in isolation
What the 12th edition changes for owners
The 12th Revised Edition, released by HFTP in February 2025 with an effective date of January 1, 2026, substantially increases reporting transparency. Guest loyalty program costs — historically hard for owners to isolate — now have discrete expense categories, letting owners judge whether a program generates business or mainly lets guests 'burn' points. The new Schedule 1-1 captures executive lounge costs within the rooms department so owners can see the real cost of club lounges rather than a merged figure.
Two further additions matter most to owners. A new Schedule 15 requires reporting of full-time-equivalent (FTE) employees by department, enabling labor-efficiency ratios such as FTEs per occupied room or per cover. And Schedule 16 consolidates all annual mandatory brand and operator costs that previously sat scattered across many expense lines — from training and recruiting to proprietary-system fees that could quietly accumulate. In addition, the former utilities schedule has been renamed Energy, Water, and Waste, moving waste out of maintenance and supporting sustainability and ESG reporting.
- Discrete guest loyalty program expense categories
- Executive lounge costs captured in Schedule 1-1
- Departmental FTE reporting in new Schedule 15
- Brand and operator costs consolidated in Schedule 16
- Utilities replaced by the Energy, Water, and Waste schedule
Reading the monthly package like an owner
Start your monthly review with structure: confirm the report follows the Summary Operating Statement sequence, that per-available-room metrics are computed correctly, and that the 12th-edition transparency items (loyalty, lounge, FTE, brand/operator costs) actually appear rather than being buried in 'other'. Then compare occupancy, ADR, RevPAR and GOPPAR against budget and the prior-year period, and watch labor as a percentage of each department's revenue — labor is the largest hotel expense and the most controllable.
Pay particular attention to flow-through: the proportion of incremental revenue over the prior period that reaches GOP. If revenue rose but GOP did not grow proportionally, expenses consumed the gain — a concrete question for the operator. Verify that non-operating items and the replacement reserve sit where they belong and that the owner result is not depressed by costs outside operations. Remember that USALI standardizes format and classification; the quality of the underlying data depends on discipline, so align definitions in the HMA and audit them in practice.
- Verify per-available-room metrics against budget and prior year
- Track labor cost as a percentage of departmental revenue
- Calculate flow-through of revenue growth into GOP
- Check that 12th-edition schedules are present, not hidden
- Separate operating items from non-operating items and the reserve
Limitations and when to bring in specialists
USALI is a format and a methodology, not a guarantee of data accuracy, and it is not tax accounting. The standard is intended to be consistent with GAAP with reference to IFRS, yet there can be material differences between USALI treatment and general accounting standards — especially around service charges, inclusive prices and the line between operating and non-operating revenue. A loosely worded HMA that claims accounts comply with both GAAP and USALI can invite disputes that need professional interpretation.
The guidance here is general and not legal, tax or financial advice for any jurisdiction or contract. For transactions, audits, HMA renegotiations or fee disputes, engage an industry auditor, asset manager and counsel familiar with your market. Because USALI is revised periodically and adoption dates matter (the 12th edition applies from January 1, 2026), always confirm current requirements on the official USALI portal before implementing a new chart of accounts or report format.
- USALI is not tax accounting and does not substitute for audit
- Material differences between USALI and GAAP can exist on revenue treatment
- Engage industry auditors and asset managers for deals and fee disputes
- Confirm the current edition and adoption date on official USALI resources
Put it into practice
Owner's month-end management package review checklist
A reusable review list for the monthly operator package built on the USALI Summary Operating Statement. Work through each item, mark it ok / not ok / needs clarification, and route your findings to the operator before you approve the period's results.
- The report follows the Summary Operating Statement sequence: operated departments → undistributed expenses → GOP → management fees → EBITDA → owner result.
- Occupancy, ADR and RevPAR reconcile with budget and the same month last year, with variances explained by the operator.
- TRevPAR and GOPPAR are computed on the correct daily count of available rooms, excluding closed or out-of-service rooms.
- Labor cost is presented by department as a percentage of that department's revenue and compared with plan.
- The 12th-edition transparency schedules are present: loyalty program costs, executive lounge, departmental FTE, and consolidated brand/operator costs.
- Energy, water and waste costs are separated and traceable to actual consumption data.
- Flow-through is calculated: the share of prior-year revenue growth that reached GOP matches the operator's stated expectation.
- Base and incentive management fees are computed on the contractual basis and the fee base is verified.
- Non-operating items (rent, interest, insurance, taxes, depreciation) are not buried inside operating expenses.
- The replacement reserve is shown separately and matches the HMA terms.
- Per-available-room metrics are comparable with the competitive set and market benchmarks.
- All open findings are documented in writing and shared with the operator before the report is accepted.
Questions people ask
What is the difference between GOP and EBITDA on a USALI statement and why does it matter to the owner?
GOP (gross operating profit) is total departmental profit minus undistributed operating expenses, and it measures what unit management directly controls — which is why it is typically the basis for incentive fees and operating-efficiency review. EBITDA appears further down, after management fees and non-operating income and expenses, and under USALI it is the profit line intended to reconcile with the hotel's financial profit. The owner result comes after interest, tax, depreciation, amortization and the replacement reserve. Do not mix the levels: judge the operator on GOP and flow-through, then review the owner-level result after fees and non-operating items.
Why is GOPPAR more informative than RevPAR for the owner of a full-service hotel?
GOPPAR is gross operating profit per available room. RevPAR captures only rooms revenue, so a hotel with strong restaurants, spa and banqueting can look weaker on RevPAR while actually earning more across all outlets. GOPPAR reflects both total revenue and total operating costs, showing how much the operating system earns on each available room before management fees and non-operating items. It therefore lets owners compare properties of different sizes and revenue mixes. Still read it with occupancy, ADR and RevPAR so you understand how the result was achieved.
Which 12th-edition USALI changes should an owner verify first in the operator's reports?
Focus on the transparency additions that expose previously hidden costs. Confirm that guest loyalty program expenses appear as discrete categories rather than being merged into other lines, that executive lounge costs are captured in a dedicated schedule, that each department reports full-time-equivalent staffing, and that all annual mandatory brand and operator costs are consolidated in one schedule. Under the 11th edition these amounts were often scattered or obscured, making it hard to assess their real cost. The 12th edition is effective from January 1, 2026, so review your current package against these requirements before that date.
How can an owner tell weak operator performance apart from a soft market?
Benchmark your per-available-room metrics — RevPAR and GOPPAR — not only against budget and prior year but also against your competitive set and market data. If your RevPAR fell in line with competitors', the cause is probably market demand. If your metrics fell harder, look internally at pricing, channel mix, service quality and cost control. Then examine flow-through: even in a soft market an operator should flex labor and other costs, so the ratio of revenue change to GOP change reveals how well management reacted to conditions.
Is receiving a monthly USALI management package enough, or should the owner add independent checks?
Receiving the package is necessary but not sufficient. USALI standardizes format and classification; it does not guarantee that the underlying data is correct. Run periodic independent checks: confirm the statement follows the Summary Operating Statement structure, verify per-available-room metrics, ensure the 12th-edition transparency schedules are present and check how management and brand fees are computed. For transactions, operator changes, audits or fee disputes, bring in an industry auditor and asset manager familiar with your jurisdiction, because material differences between USALI and general accounting standards can arise on revenue treatment.
Sources and further reading
Sources were checked when this page was generated. Confirm changing dates, rules and prices with the original publisher.
- The USALI 12th edition is finally out. Why is this good news and why it is never too late to adopt itHFTP (Hospitality Financial and Technology Professionals)
- Six USALI Changes Hotel Finance Executives Need to be Aware of in 2025HFTP (Hospitality Financial and Technology Professionals)
- USALI update drives need for more, better dataHOSPA (Hospitality Professionals Association)
- Interpreting and Auditing Hotel Accounts in 2016 – Part 5: The Hotel Operating Statement continuedHOSPA (Hospitality Professionals Association)
- HFTP, AHLA and GFC unveil 12th edition of USALIAsian Hospitality
- USALI Resources — 12th Revised Edition education and documentationHFTP USALI
- Подготовка отчетности в соответствии с USALI и анализ деятельностиМЦД Партнерс (MCD Partners)