The USALI structure, with a sample P&L
USALI is the Uniform System of Accounts for the Lodging Industry, the standard chart of accounts and P&L layout for hotels, published by HFTP with the American Hotel and Lodging Association. Its point is that costs sit in the same place at every hotel, so a management company, a lender and a buyer can all read the statement without a translation.
Here is one month for a 90-room limited-service property at 61% occupancy and an $84 average daily rate, rounded.
| Line | Amount |
|---|---|
| Rooms revenue (1,647 room nights at $84) | $138,348 |
| Other revenue | $4,150 |
| Total revenue | $142,498 |
| Rooms department expense | $41,200 |
| Other department expense | $2,300 |
| Departmental profit | $98,998 |
| Administrative and general | $13,600 |
| Information and telecommunications | $1,850 |
| Sales and marketing | $8,900 |
| Property operations and maintenance | $9,400 |
| Utilities | $10,750 |
| Gross operating profit (GOP) | $54,498 |
| Management fee at 3% | $4,275 |
| Property tax and insurance | $8,750 |
| Net operating income before reserve | $41,473 |
Gross operating profit is total revenue less departmental and undistributed operating expenses. It is the number a management company is judged on, because everything above it is under the operator's control and most of what sits below it is not. GOP here is $54,498, a 38.2% margin.
Brand costs are spread through the statement rather than sitting on one line. Under USALI the franchise royalty sits in the rooms department and the brand marketing assessment in sales and marketing, so an owner comparing a branded property with an independent one should expect the difference to show up in two places.
GOP, NOI and cash after debt service
Net operating income is GOP less management fees and fixed charges such as property tax, insurance and any ground rent. Lenders and buyers value on NOI, usually after deducting a reserve for furniture, fixtures and equipment of around 4% of revenue.
For the property above, NOI is $41,473. A 4% reserve takes $5,700, leaving $35,773. The property carries a $2.1 million loan at 7.4% on a 25-year amortization, which costs about $15,380 a month. Cash after debt service, before the owner's distributions and tax, is $20,393. The property's debt service coverage for the month, using NOI after reserve, is 2.33.
Three numbers, then: $54,498 that the operator sees, $41,473 that the bank sees, and $20,393 that the owner can actually spend. Owners tend to watch the first and lenders the second, while the third, which pays for the roof, the next renovation and the owner's distributions, appears on nobody's standard report.
GOPPAR and RevPAR, quickly
RevPAR is revenue per available room: rooms revenue divided by rooms available. For our property it is $138,348 over 2,700 room nights, or $51.24.
GOPPAR is gross operating profit per available room, $54,498 over 2,700, or $20.18. It is the better number for comparing properties of different sizes because it counts the cost of the revenue. RevPAR can rise while GOPPAR falls when the extra occupancy came from an online travel agency at 18% commission and needed a second housekeeper on overtime.
The common advice is to manage to RevPAR because it is the number the brand and the comp set report. We would manage a portfolio to GOPPAR and cash after debt service, because RevPAR does not know what the occupancy cost you. The American Hotel and Lodging Association's 2026 State of the Industry report put guest spending at nearly $805 billion for 2026 and GOPPAR at roughly 90% of its 2019 level. CoStar and Tourism Economics, in an August 2026 forecast, expect 2026 occupancy of 63.1% and GOPPAR up 4% for the year, then 1% in 2027. Those are averages across a very mixed market. Your property is not the average.
Breakeven occupancy: the formula and a worked example
Breakeven occupancy is the occupancy at which a property's contribution from rooms sold covers its fixed costs for the period, plus whatever else you decide it must cover, usually debt service and the reserve. The formula is fixed costs plus debt service, divided by contribution per occupied room, divided by available room nights.
Contribution per occupied room is ADR less the variable cost of selling one room night: housekeeping labor, linen and supplies, breakfast, commissions and the royalty that is charged as a percentage of rooms revenue. For the property above we put that at $28.60, leaving $55.40 of contribution per room sold.
Fixed costs for the month, everything that does not move with occupancy including the management fee, property tax, insurance and the reserve, come to about $59,600. Divide by $55.40 and the property needs 1,076 room nights, or 39.9% occupancy, to cover its operating costs. Add the $15,380 loan payment and it needs $74,980 of contribution, which is 1,354 room nights, or 50.1% occupancy. At 61% the cushion is eleven points.
Now drop ADR to $76, which is what a soft quarter in a secondary market looks like. Contribution falls to $47.40 and breakeven occupancy with debt service rises to 58.6%. The cushion is down to two points from a rate change alone, which is why breakeven should be run at two or three rates and not once.
The method cannot tell you about seasonality; a month at 44% in January may be fine if the property runs 78% in July, so the number that matters is the trailing twelve months against the year's fixed costs. And a limited-service model with labor treated as variable is an approximation; a 90-room property still has a front desk at 30% occupancy.
What the 12th edition changes for an owner
The 12th revised edition of USALI took effect on 1 January 2026. HFTP describes the main additions as new line items for digital marketing, loyalty program benefits and sustainability, and says phased adoption is acceptable. For an owner reading a per-property P&L, the practical effect is that three costs that used to hide inside general marketing, rooms expense or utilities now have their own lines and can be compared across properties.
That helps only if all three properties move to the new layout in the same month. If the management company converts one property in March and the other two in September, the year-over-year comparison for sales and marketing is broken until the following spring. Ask when each file changes over.
Three properties, one management company
Take an owner with three limited-service properties in central Texas. Each is its own LLC with its own loan and its own QuickBooks Online file, and a fourth LLC, the management company, employs the general managers and charges each property a 3% fee. Her bookkeeper closes each file about five weeks after month end. What she wants on a Monday morning is how each property did over the weekend, and whether the one with the thinnest coverage is still covering its loan. July's GOP can wait.
The books can answer that if someone reads all three and does the arithmetic. The management fee has to be canceled before the four files are added, or $12,825 a month of her own money shows up as revenue in one company and expense in three others. Whether each property should have its own file or a class in one file is normally settled by the lenders, who want an entity-level statement each quarter. The rhythm for reading several companies together is the subject of managing the finances of several businesses.
Navigator reads each property's QuickBooks Online file read-only, refreshes daily and shows margin and cash per property and for the group, with a morning brief by email and recommended KPIs for hotels. On the Pro plan it eliminates the management fee between the entities and shows breakeven occupancy and coverage against each property's own loan terms, so GOP to cash after debt service is visible by property without a spreadsheet. The free accounting health check will tell you whether the three files are clean enough to read that way.
Questions owners ask
What is USALI?
USALI is the Uniform System of Accounts for the Lodging Industry, the standard chart of accounts and P&L layout for hotels, published by HFTP with the American Hotel and Lodging Association. It fixes which costs belong to which department and where gross operating profit is drawn, so a 90-room property in Ohio and a 400-room resort in Florida report the same way.
What changed in the USALI 12th edition?
The 12th revised edition took effect on 1 January 2026. For an owner, the visible changes are new line items for digital marketing, loyalty program costs and sustainability spending, so those costs stop hiding inside general marketing or utilities. HFTP has said phased adoption is acceptable, so your management company may still be moving accounts across during 2026.
How do you calculate breakeven occupancy?
Add the property's fixed costs for the period to its debt service and any reserve you fund. Divide by the contribution per occupied room, which is average daily rate minus the variable cost of selling one room night. That gives the room nights you need. Divide by available room nights for the occupancy percentage. It moves with rate, so run it at two or three rates.
What is GOPPAR?
GOPPAR is gross operating profit per available room: GOP for the period divided by the number of rooms available in that period. Unlike RevPAR, it counts costs, so it falls when occupancy is bought with commissions and overtime. It is the number for comparing properties of different sizes on profit rather than on sales.
What is a good GOP margin for a hotel?
It depends on service level, brand and market, and the benchmarks we would trust are paid subscription products from STR and HotStats rather than a free number on a blog. Limited-service properties run higher GOP margins than full-service ones because they carry less labor and no food and beverage. Compare each property with its own prior year first.
Related
When the lender's question is whether each property covers its loan, debt service coverage ratio for business owners walks through the calculation. The file structure question is covered in one QuickBooks file per LLC or classes, and the weekly and monthly routine for a group of companies in how to manage the finances of several businesses.
If you want to see all three properties this way by tomorrow morning, the trial connects each file in about fifteen minutes and needs no card: navigatorhq.ai.
Published . Last updated . Reviewed by a CFO on the Navigator team.