Not one P&L — a stack of them
Rooms, food and beverage, spa and events each carry their own revenue, direct cost and departmental profit. The discipline of hotel accounting is keeping them separable.
Hotels do not have a profit and loss account so much as a stack of them. Rooms, food and beverage, spa, events and other operated departments each carry their own revenue, direct cost and departmental profit — and the whole discipline of hotel accounting is keeping them separable.
Reporting the way the industry reads it
The Uniform System of Accounts for the Lodging Industry (USALI) is the standard structure, and owners, operators, lenders and valuers all expect it. It reports departmental profit before undistributed operating expenses, then gross operating profit, then the fixed charges below it — which is what allows a hotel to be compared with any other hotel regardless of ownership structure.
| Metric | Calculation | What it tells you |
|---|---|---|
| Occupancy | Rooms sold ÷ rooms available | Volume — but says nothing about price |
| ADR | Rooms revenue ÷ rooms sold | Price achieved — but says nothing about volume |
| RevPAR | Rooms revenue ÷ rooms available (or occupancy × ADR) | The combined figure; the sector's primary comparator |
| TRevPAR | Total revenue ÷ rooms available | Whether F&B and other departments are pulling their weight |
| GOPPAR | Gross operating profit ÷ rooms available | What actually reaches the owner — the one that matters most |
The UAE-specific items
- Amounts collected for others are not revenue. Tourism fees charged per room per night, municipality fees and service charges collected on behalf of staff are pass-through items. Running them through revenue overstates the top line and distorts every per-room metric derived from it.
- Deposits and advance bookings are contract liabilities until the stay occurs, not revenue when received.
- OTA commissions — bookings through online travel agents should generally be recorded at the gross room rate with commission as a cost, not at the net remittance, for the same reasons that apply to delivery aggregators in F&B.
- Management and franchise fees — base and incentive fees calculated on defined revenue and GOP measures, which makes the accuracy of those measures a contractual matter, not just a reporting one.
- Operating equipment — linen, china, glassware and silver, which need a consistent capitalisation and replacement policy rather than being expensed erratically.
- Owner versus operator reporting — where a hotel is operated under a management agreement, the owning entity's statutory accounts and the operator's USALI reporting serve different audiences and must reconcile.
Rooms revenue in the accounting system to the property management system's night audit, every day. A hotel that reconciles PMS to ledger daily finds rate errors, unposted charges and comp discrepancies while they can still be corrected; one that reconciles monthly finds them in aggregate, when nobody can attribute them to anything.
Reviewed 18 August 2026 by Ahmed Nabil Selim. UAE tax rates, thresholds and deadlines change — confirm the position for your period before relying on it.
Hospitality — frequently asked questions
The Uniform System of Accounts for the Lodging Industry — the sector's standard chart of accounts and reporting structure, reporting revenue and direct cost by operated department, then undistributed expenses, then gross operating profit. It is not a legal requirement, but management agreements frequently mandate it, and owners, lenders, valuers and benchmarking services all expect it. A hotel not reporting on USALI cannot be compared against its market, which is a real commercial disadvantage.
Generally no — amounts collected from the guest on behalf of an authority or on behalf of staff are pass-through items rather than the hotel's own revenue, and should be carried as liabilities until remitted. Including them in revenue overstates the top line and distorts ADR, RevPAR and every other per-room metric calculated from it, which matters commercially because those metrics drive benchmarking, management fees and valuation.
Generally at the gross room rate with the online travel agent's commission recognised as a cost, where the hotel is the principal supplying accommodation to the guest. Recording the net remittance understates revenue, hides a substantial and controllable cost line, and depresses ADR and RevPAR — which then flow into benchmarking and management fee calculations. Where a booking is genuinely made on a merchant or wholesale model, the analysis can differ, so the contract terms determine the treatment.
Is this your business?
Tell us how it is set up and where the numbers currently stand. We will tell you what is required and what it costs to have it handled properly.
Talk to an accountant →