Hotel Operator Report: USALI, GOP, What an Investor Should Read

An operator's report under the USALI standard shows the path of a hotel's money: revenue by department, departmental profit, undistributed expenses, GOP, operator fees, EBITDA and the renewal reserve. Three things matter most to an investor: how much of revenue reached GOP, how the report reconciles with the bank, and which lines the operator controls and which it does not. Below is the reading order with a worked example.

What USALI is and which edition applies

USALI (Uniform System of Accounts for the Lodging Industry) is the industry's hotel reporting standard, maintained by HFTP and AHLA. According to AHLA, the 12th edition came out on 11 July 2024 and began to be applied from 1 January 2026. It adds separate schedules: headcount and payroll (Payroll FTE), and the mandatory annual costs of the brand and the operator; AHLA also names sustainability as one of the areas where reporting has been extended.

The practical conclusion for an investor: reports for 2026 and for earlier periods may be compiled under different editions. Ask the operator which edition the report was prepared under and whether prior years were restated for comparison.

How the report is built: the line order

According to this description of the structure (HOSPA), the report runs in this order:

1. Revenue by department: rooms, food and beverage (F&B), other. Less departmental costs equals departmental profit.
2. Undistributed expenses: administration, sales and marketing, building maintenance, utilities, IT.
3. GOP (gross operating profit): departmental profit minus undistributed expenses. This is the measure most directly influenced by the hotel's management.
4. Operator fees under the management agreement: base fee and incentive fee.
5. Items outside management's control: property tax, insurance, rent on the building or equipment.
6. EBITDA, which should reconcile with the hotel's financial statements.
7. Reserve for replacing furniture and equipment (FF&E reserve) as a separate line.

Between GOP and EBITDA the hotel loses money on items management does not control. That is why GOP can be high while the owner receives little, if fees and fixed charges are large. The fees are covered in the article on lease and management.

Indicators at the top of the report

• Occupancy: rooms sold divided by rooms available.
• ADR: room revenue divided by rooms sold.
• RevPAR: room revenue per available room (occupancy multiplied by ADR).
• TRevPAR: total revenue per available room.
• GOPPAR: GOP per available room.
• GOP margin: GOP to revenue.
• Flow-through: the increase in GOP divided by the increase in revenue between periods.

Worked example, not a forecast

The assumptions are mine: 50 rooms, occupancy of 80% in both years, year 2 brings a 5% rise in rate. Operator fee of 3% of revenue plus 8% of adjusted GOP, fixed charges of about 4% of revenue, reserve of 4%. Figures in thousands of euros.

Revenue grew by 5%, GOP by only 3.2%, and the margin fell. Flow-through was 21%: of each extra euro of revenue, 21 cents reached GOP, less than the current margin of 33%. The operator may explain this by higher wages or marketing, and the investor's question is which lines grew and why. RevPAR rose, yet the owner received 14,000 € more cash flow on revenue that was 146,000 € higher.

What to ask the operator for

1. A monthly USALI report with budget, prior year and variances.
2. A competitive-set report: your RevPAR against competitors' RevPAR, as in the contract's performance test.
3. The schedule on headcount and staff costs.
4. The schedule on mandatory brand and operator costs: what the hotel pays and to whom.
5. A cash reconciliation: the report against bank statements and the FF&E reserve account.
6. The capital expenditure plan and the use of the reserve.
7. Month-by-month dynamics: seasonality hides in an annual figure, see the article on Barcelona's seasonality.

Typical places where a report misleads

• The tourist tax ends up in revenue. It is collected for the state and is not part of the hotel's revenue, so check how it is shown; more in the article on the tourist tax.
• EBITDA and cash flow get confused: between them lie the reserve, capital expenditure and debt payments.
• One good month is passed off as a trend.
• Brand and operator costs may be spread across different lines. The 12th edition has a separate schedule for them; insist on it.

The other indicators of a hotel project are described in the piece on hotel KPIs, valuation by price per key in the article on hotel valuation, and the general format of reporting to an investor in the article on investor reporting.

Who this breakdown does not suit

It is no substitute for an independent audit: the operator prepares the report itself, and your accountant or asesor should check it. It also does not suit hotels without standard USALI reporting, for example very small properties where the report is kept in simplified form. DNPI's hotel approaches are described on the hotel strategies page.