Does your hotel really know where it makes and loses money? USALI 12: a tool to better understand hotel operations without replacing IFRS

By: MBA Fernando Campos

Managing Partner - EAS LATAM

A hotel can have high occupancy, sell more rooms, and still lose profit margin. It can also have a full restaurant, active events, and a lot of operational activity, but little actual profitability at the end of the month.

Often the problem lies not only in the operation itself, but also in how the financial information is presented and analyzed. A traditional income statement can tell you if the hotel made a profit or a loss, but it doesn't always explain where the profit or loss occurred, which channel was most profitable, or what costs are putting pressure on the margin.

That's where USALI comes in, which stands for Uniform System of Accounts for the Lodging Industry. Its function is to organize hotel information by operational areas, indicators, and profit centers.

USALI version 12 comes into effect on January 1, 2026 and has a clear focus: to bring greater transparency to hotel operations.

USALI does not replace IFRS

USALI is not an accounting standard like IFRS (International Financial Reporting Standards). Nor does it replace the financial statements that a company must prepare under the applicable accounting framework.

The difference can be summarized as follows:

Frame	What is it for?
IFRS	Prepare general purpose financial statements.
USALI	Read the hotel operation by departments, margins, channels and indicators.

In simple terms: IFRS organizes the financial statements; USALI helps to understand the hotel's operation.

The USALI 12 presentation itself clarifies that USALI does not define accounting principles such as GAAP or IFRS, but rather serves as a guide for standardized financial reporting, management analysis, and hotel comparison.

Why a hotel should consider it

Adopting USALI doesn't mean complicating accounting. It means presenting information in a way that makes sense to the hotel industry.

A hotel is not just one line of sales. It has rooms, food and beverage, events, laundry, maintenance, technology, energy, water, waste, commissions, payroll, loyalty programs, and branding costs.

USALI helps answer very practical questions:

Hotelier's question	How USALI helps
Does the rooms leave the expected margin?	Separate the department's income, costs, and profit.
Does food and beverage generate profit or just movement?	It allows you to see a specific margin of the area.
Do digital platforms fill the hotel but reduce profitability?	It helps to analyze revenue and costs by channel.
Is the payroll aligned with occupancy and service?	It allows measuring labor productivity.
Are energy, water, and waste affecting the margin?	It gives greater visibility to these costs.
Are the branding costs clear to the owner?	It presents them in a more organized way.

A simple example: view the hotel by departments

A traditional income statement might look like this:

Traditional state	Amount
Total revenue	US$800,000
Operating costs and expenses	US$580,000
Operating profit	US$220,000

That report shows that the hotel won, but it doesn't explain where.

Under a USALI logic, the same result can be read as follows:

Department	Income	Direct expenses	Departmental utility	Margin
Rooms	US$520,000	US$130,000	US$390,000	75%
Food and beverages	US$220,000	US$190,000	US$30,000	14%
Other departments	US$60,000	US$35,000	US$25,000	42%
Undistributed expenses	-	US$225,000	-	-
GOP	-	-	US$220,000	28%

GOP stands for Gross Operating Profit. In this example, the hotel is profitable, but food and beverage has a low margin. Without a breakdown by department, this pressure can go unnoticed.

OTAs: not all room revenue is of the same quality

An OTA, or Online Travel Agency, is a digital booking platform. These platforms can help fill rooms, but they don't always generate the same profitability as direct sales.

Channel	Gross income	Commission / channel cost	Estimated net income	Managerial reading
Direct web	US$80,000	US$2,000	US$78,000	Most profitable channel
OTA retail	US$120,000	US$18,000	US$102,000	High volume, lower margin
OTA merchant	US$60,000	US$12,000	US$48,000	Review actual profitability
Corporate negotiation	US$90,000	US$3,000	US$87,000	Good stability
Wholesalers / tour operators	US$70,000	US$10,500	US$59,500	Evaluate net rate

USALI 12 expands the definitions for segmenting room revenue, including discounted, negotiated, qualified, promotional, OTA discount, and opaque rates. This helps to better analyze revenue quality, not just sales volume.

A practical point: who collects the booking fee can affect the reading

There are two common methods for booking through digital platforms:

Mode	Simple explanation	Risk for analysis
Property collects	The guest pays directly at the hotel.	Normally the hotel charges the full rate and the commission is charged separately.
OTA collects	The guest pays the platform, and the platform then pays the hotel.	If the hotel only records the net amount received, the average rate may appear lower.

This point affects the ADR, which stands for Average Daily Rate.

For example, a room sold for US$200 through an OTA with an 18% commission might generate a net revenue of US$164 for the hotel. If some bookings are recorded at the gross rate and others at the net amount received, the ADR might decrease not because the hotel sold for less, but because the commission was hidden within the revenue.

The managerial recommendation is simple: compare channels on a level playing field. Commissions and distribution costs must be clearly visible to determine whether a platform is profitable or simply creates occupancy.

Indicators that owners and managers should review

USALI also allows connecting operational indicators with financial results.

Indicator	What does it mean	What is it for?
ADR	Average daily rate	It measures the average price per room sold.
RevPAR	Revenue per available room	Combine occupancy and rate.
GOP	Gross operating profit	It measures the hotel's operational performance.
GOPPAR	GOP per available room	It measures profitability by installed capacity.
FTE	Full-time equivalent employees	Relate payroll to productivity.

A hotel can increase occupancy and average rate, but not improve its operating profit if commissions, payroll, energy, laundry, or branding costs increase.

What changes with USALI 12

The new version aims for greater transparency. Key changes include new reports and adjustments to room usage, loyalty programs, executive lounges, energy, water, waste management, payroll, mandatory brand costs, and all-inclusive hotels.

Rooms and loyalty programs.

The way to segment revenue is expanded and more clarity is given to costs related to guest benefits, points, promotions and service recovery.

Executive Lounge. A specific report is created for executive lounges, club lounges, or similar spaces. This helps identify the cost of maintaining them and whether the cost corresponds to guests who paid for access or to loyalty program benefits.

Energy, Water, and Waste. A report on energy, water, and waste is now included. In tourist hotels, this is especially relevant due to sustainability, operational efficiency, and the information requirements of owners, brands, banks, and corporate clients.

Payroll FTE. A full-time equivalent employee report has been added. This helps measure whether the payroll is aligned with occupancy, service, and revenue.

Mandatory brand and operator costs. An annual report is included to identify costs required by the brand or operator, such as mandatory programs, systems, and services. For owners, this improves the visibility of costs that are not always clearly visible in a general financial statement.

What should hotels in Costa Rica do?

The first step isn't to change the entire accounting system. The first step is to review whether the current chart of accounts allows for the proper separation of rooms, food and beverage, other departments, administration, sales, technology, maintenance, energy, water, waste, payroll, and brand costs.

Next, the hotel should prepare monthly reports that go beyond the general income statement. Management should be able to see margins by department, sales channels, operational indicators, unallocated costs, and variances against budget.

USALI 12 is not meant to complicate hotel accounting. It's meant to streamline the financial conversation between owners, operators, managers, and accountants.

References

Hospitality Financial and Technology Professionals (HFTP). Uniform System of Accounts for the Lodging Industry, 12th Revised Edition.

American Hotel & Lodging Association (AHLA). HFTP, AHLA and Global Finance Committee announce the 12th Revised Edition of USALI.