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Reference  ·  USALI

Practical USALI

The Uniform System of Accounts for the Lodging Industry ”” department by department. What each line item means, where it posts, common miscodings, and the nuances that matter when you're working with real hotel P&Ls.

What USALI is

USALI is the accounting standard used by virtually all branded and independently managed hotels in the United States. It establishes a consistent chart of accounts ”” which costs go in which departments, how revenue is categorized, and how the P&L is structured from top line to NOI.

The official publication (now in its 12th edition) costs $100+ and runs several hundred pages. This guide covers the practical application ”” what operators actually need to know to work with a hotel P&L, post journal entries correctly, and understand why a line item belongs where it does.

Rooms

Operated Department

The core department at every hotel. Rooms revenue is ADR × occupied rooms. Rooms expense covers everything required to deliver the guest room experience ”” cleaning it, staffing the front desk, and supplying it.

Line ItemWhat It CoversBenchmark Convention
Rooms RevenueTransient, group, and contract room revenue. Net of any complimentary rooms.ADR, RevPAR, RGI
Total Rooms Revenue
Salaries, Wages & BenefitsFront desk, housekeeping, housepersons, laundry, bell/door staff. The largest expense line in most Rooms departments.CPOR, MPOR, PTEB%
Contract / Outsourced LaborAgency housekeeping, third-party front desk or concierge. Appears as a separate line from wages under USALI 12th edition.CPOR (combined)
Linen, Terry & UniformsReplacement linen and towels, uniform expense or rental.CPOR
Guest SuppliesIn-room amenities (shampoo, soap, coffee), stationery, key cards.CPOR
LaundryIn-house laundry expense or outside laundry service. Can post in Rooms or as a shared laundry cost center depending on property setup.CPOR or separate
ReservationsThird-party reservation fees, CRS costs, OTA commissions if coded to Rooms (varies by property).% of Rooms Revenue
Other ExpenseMiscellaneous Rooms-related costs: dry cleaning, minibar, postage.CPOR
Total Rooms Expense
Rooms Dept ProfitRooms Revenue minus Rooms Expense. Typically the highest-margin department ”” 70”“80%+ at full-service hotels.% of Rooms Revenue
Common miscodings

Contract housekeeping in A&G: If a property switched to an agency mid-year and the invoices came through accounts payable coded to a generic vendor GL, they may land in A&G or Other Expense instead of Rooms. Look for A&G spikes paired with Rooms labor savings in the same period.

OTA commissions split across departments: Some properties code OTA commissions to Sales & Marketing rather than Rooms. If you're benchmarking Rooms expense ratios across properties, confirm where each property codes distribution costs before comparing.

Resort fees: Resort fee revenue may post as Rooms Revenue (correct for most flag standards), Miscellaneous Income, or as a cost offset. The treatment affects ADR and RevPAR comparability. Ask before you compare.

For new GMs

Everything that happens in the room or at the front desk is a Rooms department cost. If it takes labor to clean the room, stock the room, check the guest in, or carry the guest's bags ”” it goes in Rooms. The test: would the cost go away if the hotel had zero occupied rooms? If yes, it's Rooms expense.

Food & Beverage

Operated Department

F&B is one of the most complex departments to operate and account for. Revenue comes from multiple outlets (restaurant, bar, banquets, catering, in-room dining). Cost of goods and labor each require outlet-level tracking to manage effectively.

Line ItemWhat It CoversNotes
Food RevenueRestaurant, room service, banquet food sales, catering food.Net of employee meals and comps
Beverage RevenueBar, restaurant bar, banquet beverage, minibar.Tracked separately for cost of goods analysis
Other F&B RevenueAudio/visual rental, labor charges billed to groups, service charges passed through to employees.Service charge treatment varies by state
Total F&B Revenue
Cost of Food SoldFood cost of goods sold. Benchmark: 28”“34% of food revenue depending on outlet mix.COGS% of food revenue
Cost of Beverage SoldBeverage cost of goods sold. Benchmark: 18”“24% of beverage revenue.COGS% of beverage revenue
Salaries, Wages & BenefitsKitchen, servers, bartenders, banquet staff, F&B management, stewards.Largest F&B cost line
Contract / Outsourced LaborBanquet staffing agencies, specialty food production contracts.Separate from in-house wages
China, Glass, Silver & LinenReplacement cost for breakage and wear. Often tracked per cover.Per cover or % of revenue
LicensesLiquor license fees, health permit.Fixed cost
Printing & StationaryMenus, wine lists, catering materials.
Other ExpenseKitchen supplies, cleaning materials, decorations, music licensing.
Total F&B Expense
F&B Dept ProfitF&B margins are much tighter than Rooms ”” full-service hotel F&B typically runs 15”“25% profit margin. Some outlets (hotel bar, catering) are more profitable than others (complimentary breakfast).% of F&B Revenue
Common miscodings

E&P (Entertainment & Promotion / Employee Meals): Employee meals are technically a cost of food sold, but they're often tracked as an E&P or promotional expense line. They reduce Food Revenue (or post as a direct expense) depending on the system. The treatment affects COGS percentages ”” know whether the hotel you're looking at nets employee meals from revenue or expenses them separately.

Service charges: In states where auto-gratuities must be distributed to employees, they pass through both revenue and expense (wash). In states where management can retain them, they're pure revenue. The treatment affects total F&B revenue comparability across properties in different states.

Banquet labor billed to groups: Some hotels bill labor charges as a line item on banquet event orders. These appear as F&B revenue and are offset by the corresponding labor cost ”” but if the billing is in a different period than the labor cost, they'll look like a timing distortion in the monthly numbers.

For new GMs

F&B is the department most likely to have revenue and expense coding issues, because the money flows through multiple systems (POS, catering/event management, room service). When F&B results look off, the first question is whether revenue and cost are matched to the same period and the same outlet. A catering event that happened in month-end will often have the revenue in one month and the food cost in another.

Other Operated Departments

Operated Department

Everything outside of Rooms and F&B that generates revenue and has a matched set of direct operating expenses. Common departments: Parking, Spa, Golf, Marina, Retail, Recreational Services.

DepartmentRevenue SourcesKey Expense Lines
ParkingValet and self-park fees, monthly parking contracts.Labor (valet attendants), equipment maintenance, third-party parking management fee if outsourced.
SpaTreatment revenue, retail product sales, membership fees.Therapist labor (often contract/commission), product cost, retail COGS, supplies.
GolfGreen fees, cart rental, pro shop, lessons.Grounds maintenance labor, cart fleet, pro shop COGS, supplies.
MarinaSlip rental, fuel, boat services, launch fees.Dock staff, fuel cost, maintenance, insurance.
RetailGift shop, sundry, logo merchandise.COGS (typically 40”“55% of retail revenue), staff labor.
Pool / RecreationPool bar revenue, cabana rentals, equipment rental.Labor, supplies, F&B cost for pool bar if tracked separately.
Other Operated Dept ProfitVaries widely by department and property type. Parking is often the highest-margin ancillary department at urban hotels.
For new GMs

The test for whether something belongs as an "Other Operated Department" versus Miscellaneous Income: does it have dedicated staff, direct operating costs, and a manager responsible for it? If yes, it gets its own department schedule. If it's incidental revenue (e.g., vending machine commissions, laundry facility revenue), it posts to Miscellaneous Income.

Administrative & General

Undistributed Expense

A&G covers the management and administrative functions that support the entire hotel ”” not tied to any single revenue-generating department. The largest line in this department is almost always the General Manager's compensation.

Line ItemWhat It Covers
Management / GM SalaryGeneral Manager compensation and benefits. Often the single largest line in A&G. Posts here ”” not in Rooms, not in any operated department.
Salaries, Wages & BenefitsController, accounting staff, HR, administrative assistants, loss prevention.
Audit FeesExternal audit and accounting services.
Bad Debt ExpenseUncollectable AR written off. Watch for spikes ”” often signals a group billing problem or credit policy issue.
Bank ChargesCredit card processing fees, wire transfer fees, merchant fees.
Cash Overages / ShortagesNet variance between cash counted and cash expected across all cash-handling positions.
Corporate Office ChargesPass-through fees from the management company or brand for shared services ”” HR systems, accounting platforms, legal, executive overhead.
Guest RelocationCost to walk a guest to another hotel ”” one night elsewhere plus transportation. Spikes signal overbooking or mechanical/availability issues.
Insurance ”” GeneralGeneral liability insurance premium. (Property/casualty often posts below the line ”” see Fixed Charges.)
Office SuppliesGeneral administrative supplies.
Postage & TelecommunicationsPostage, overnight courier, general phone service (not IT-managed systems).
Travel ”” ManagementGM and management travel, training conferences.
Total A&G Expense
Common miscodings

GM salary in Rooms: Some older management systems or non-USALI properties code the GM to Rooms because the GM "oversees" front desk. Under USALI, the GM is A&G. If you're comparing Rooms expense ratios with a property that codes differently, you'll see a big swing in A&G that doesn't show in Rooms.

Brand fees: Base brand fees (royalty/franchise fees) can post in A&G or Sales & Marketing depending on the management company's chart of accounts. Confirm before comparing undistributed departmental ratios across brands.

Guest relocation spikes: A sudden jump in Guest Relocation often hides in A&G and is easy to miss in a top-line review. It's always worth asking about when A&G runs over ”” it may point to an unreported service failure (A/C outage, pest issue, room quality problem) that has guest satisfaction and reputation implications beyond the dollar amount.

Information & Technology Systems

Undistributed Expense

All technology systems that run the hotel ”” from the property management system to in-room entertainment. IT posts as a separate undistributed department under USALI 11th edition and later.

Line ItemWhat It Covers
IT Salaries & WagesOn-property IT staff or IT director if the hotel has one. Most select-service hotels have no dedicated IT FTE ”” systems support is corporate or third-party.
PMS ”” Property Management SystemMonthly software fee for the front desk / reservation system (Opera, Fosse, Lightspeed, etc.).
POS ”” Point of SaleRestaurant and bar POS software and support.
Revenue Management SystemIDeaS, Duetto, Rainmaker, or similar RMS subscription.
Wi-Fi / InternetGuest-facing Wi-Fi and back-of-house internet connectivity.
TelephonyIn-room phone system, call accounting, PBX.
In-Room EntertainmentIPTV, streaming service licensing, set-top box fees.
CybersecuritySecurity monitoring, endpoint protection, compliance tools.
Other IT SystemsLabor management, catering/event systems, key card software, building automation.
Total IT Expense
Common miscodings

IT vs. A&G boundary: At properties that haven't fully converted to USALI 11+ structure, IT costs may still be coded in A&G. When comparing total overhead across hotels, always check whether IT is a separate line or embedded in A&G before drawing conclusions about either department's size.

PMS computer hardware: Computer hardware (desktops, tablets, printers) can post in IT or in A&G ”” or occasionally in the department that uses the equipment (a kitchen printer in F&B). Clarify the property's convention before investigating a hardware purchase as an IT anomaly.

Sales & Marketing

Undistributed Expense

All costs associated with generating demand ”” sales team compensation, marketing spend, brand fees, and distribution costs. The department that most often has costs coded differently across properties and brands.

Line ItemWhat It Covers
Salaries, Wages & BenefitsDOS, DOSM, sales managers, catering sales, revenue manager (if not in Rooms), marketing coordinator.
Brand/Franchise FeesRoyalty or franchise fee paid to the brand (% of rooms revenue). Commonly 5”“7% of rooms revenue at major flags.
Loyalty Program CostsPoints earned by guests, reimbursement rates to the brand's loyalty program. Usually a fee per stay or per point earned.
Advertising ”” DigitalPaid search, social media ads, metasearch (Google Hotel Ads, TripAdvisor).
Advertising ”” Print / OtherLocal print, radio, collateral printing.
Agency / Third-Party MarketingPR agency, photography, website management contracts.
OTA CommissionsCommissions paid to Expedia, Booking.com, and similar platforms. Some properties code this to Rooms; most code it here.
Travel Agent CommissionsTraditional TA commissions ”” typically 10% of room revenue on qualified bookings.
Sales Meals & EntertainmentClient entertainment, site tours, FAM trip costs.
Total Sales & Marketing Expense
Common miscodings

Revenue manager in Sales vs. Rooms: Some properties place the revenue manager's salary in Sales & Marketing; others place it in Rooms. Neither is wrong under USALI, but it affects departmental ratios. When Rooms labor looks lower than expected at a comp property, check whether their RM posts elsewhere.

Brand fees split across departments: Base royalty fees, program fees (Marriott Bonvoy, Hilton Honors), and system contribution fees are often three separate line items that can post in Sales & Marketing, A&G, or IT depending on the management company's policy. Before concluding a property has lower brand cost exposure, verify the full fee stack and where each piece lands.

Property Operations & Maintenance

Undistributed Expense

Engineering, preventive maintenance, and all repair and maintenance costs for the building, its systems, and its grounds. Commonly abbreviated POM or R&M in operating statements.

Line ItemWhat It Covers
Engineering Salaries & WagesChief engineer, maintenance technicians, grounds crew, pool operators.
Elevator MaintenanceElevator service contract ”” mandatory for most multi-story hotels.
HVAC MaintenancePreventive maintenance contracts and repairs for heating and cooling systems.
Electrical / PlumbingLicensed contractor calls for electrical and plumbing repairs.
Painting & DecoratingInterior painting, touch-up work, minor cosmetic maintenance.
Grounds & LandscapingLandscaping contract or in-house grounds maintenance.
Pool MaintenanceChemical, service contract, lifeguard if applicable.
Pest ControlRegular pest control contract plus reactive call-outs.
Snow RemovalSeasonal contract or variable cost at northern properties.
Equipment MaintenanceKitchen equipment service, laundry equipment, fitness equipment.
Contracted ServicesSpecialized maintenance contracts that don't fit other lines.
Total POM Expense
For new GMs

POM is the department that gets cut when budgets are tight and pays for it in year two or three. Deferred maintenance compounds ”” a roof that needs $50K of repair this year needs $200K if it goes three more years. When reviewing POM results, a property that runs significantly under budget on maintenance is often borrowing from the future.

Capital expenditures (replacing a roof, upgrading HVAC, purchasing new FF&E) do not post in POM ”” they go to the balance sheet and depreciate over time. The line between a repair (expense) and a capital improvement (capitalize) is one of the more judgment-intensive accounting decisions in hotel operations.

Utilities

Undistributed Expense

All utility consumption ”” electricity, natural gas, water and sewer, fuel oil, and steam. Often one of the top-5 expense lines in a hotel P&L.

Line ItemWhat It CoversBenchmark
ElectricityAll electric consumption ”” HVAC, lighting, laundry, kitchen equipment, common areas.Largest utility line; benchmarked PAR or POR
GasNatural gas for heating, kitchen cooking equipment, hot water.Highly seasonal in northern markets
Water & SewerMunicipal water consumption and sewer charges.Driven by laundry and pool volume
Fuel OilHeating oil at properties without natural gas service.Seasonal; price volatile
SteamDistrict steam service in urban markets.Often substitutes for gas
Total Utilities
For new GMs

Utilities are a fixed-variable hybrid: base building consumption (lobby, corridors, kitchen) is roughly fixed regardless of occupancy, but guest room consumption scales with occupancy. This means utilities benchmarked PAR are most useful for comparing base building efficiency across hotels; utilities benchmarked POR are more useful when comparing occupancy-driven variance to budget.

Rate changes (a utility company rate increase) move this line without any change in operational efficiency. When Utilities runs over, always split the variance into rate vs. consumption before drawing conclusions about operational performance.

Fixed Charges & Below-the-Line Items

Fixed / Non-Operating

The costs that sit between GOP and EBITDA ”” and below EBITDA to NOI. These are real cash expenses and real obligations, but they're largely outside the operating team's day-to-day control.

Line ItemWhat It IsWho Controls It
Management Fees ”” BaseMonthly fee to the management company, typically 2”“3% of total revenue.Ownership (negotiated in management agreement)
Management Fees ”” IncentivePerformance fee triggered when GOP or EBITDA exceeds a threshold. Structure varies by agreement.Ownership (negotiated)
Property TaxesReal estate taxes on land and building assessed by the municipality.Ownership; can appeal assessments
Insurance ”” PropertyProperty and casualty insurance on the building and contents.Ownership; negotiated with broker
FF&E Reserve4”“5% of revenue set aside for capital reinvestment in furniture, fixtures, and equipment.Ownership; defined in management agreement
EBITDAGOP minus management fees, property taxes, insurance, and reserve. The ownership valuation metric.
Interest ExpenseInterest on the hotel mortgage or construction loan. Pure financing cost ”” doesn't appear in the operating P&L.Ownership (debt structure)
Depreciation & AmortizationNon-cash accounting expense for the wear on the asset and amortization of intangibles.Accounting; by definition below EBITDA
Income TaxesEntity-level income taxes. Structure-dependent ”” many hotel ownership entities are pass-through (LLC, LP) and pay no entity-level tax.Ownership (entity structure)
NOI ”” Net Operating IncomeThe final cash return to the asset owner after all obligations. Used in cap rate valuation: NOI ÷ Cap Rate = Property Value.
Watch for

Costs coded below GOP that belong above it: Occasionally management companies or accounting staff code costs below the GOP line that USALI places above it. Any cost that the operator incurs and has some ability to manage should sit above GOP. If something shows up in "Other Expense" below management fees that looks like an operating cost, ask where it should be.

EBITDA before vs. after reserve: Some ownership groups report EBITDA with the FF&E reserve deducted; others report it before the reserve and show reserve separately. This can create a 4”“5% of revenue difference in reported EBITDA. Always confirm the convention when comparing across properties or against industry benchmarks.

Related reference pages:
Hotel P&L Waterfall ”” the full structure from top-line revenue to NOI.
Hotel KPI Dictionary ”” definitions and practical use for ADR, RevPAR, GOP, CPOR, MPOR, and more.