INSIGHT

Accounting Considerations for Hotel and Resort Owners 

Mark Leverette • April 28, 2026

Services: Outsourced Accounting Industries: Hotels and Resorts

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Running a hotel or resort means managing a financial operation that looks nothing like other real estate businesses. You’re reconciling daily revenue cycles across multiple departments, managing labor costs that shift with occupancy, maintaining capital reserves, and keeping investors and lenders satisfied with reporting that reflects your property’s true performance. The accounting requirements that come with all of that are substantial, and the stakes for getting them wrong are high. 

6 Key Accounting Considerations for Hotel and Resort Owners 

Here are some of the key accounting considerations that hotel and resort owners need to understand. 

1. Departmental Accounting and the Uniform System of Accounts 

Most hospitality businesses follow the Uniform System of Accounts for the Lodging Industry (USALI), which provides a standardized framework for categorizing revenues and expenses by department. Under this system, rooms, food and beverage, spa, events, and other revenue-generating departments each maintain their own profit and loss statements, which then roll up to a property-level income statement. 

This structure serves as the foundation for tracking gross operating profit (GOP) and departmental flow-through, benchmarking performance against comparable properties, and identifying where margins are improving or eroding. Without it, you’re managing operations based on a blended view that obscures the real story. 

2. Revenue Recognition Across Multiple Streams 

Hotel and resort revenue comes from many sources at once, including: 

• Room rates 
• Food and beverage sales 
• Event and meeting space 
• Loyalty program redemptions 
• Booking platform fees 
• Ancillary services 

Each of these can carry different revenue recognition implications under ASC 606, the accounting standard governing how and when revenue is recorded. 

Loyalty programs in particular can create complexity. When guests earn and redeem points, those transactions create deferred revenue obligations that must be tracked and recognized accurately. The same applies to nonrefundable deposits, prepaid packages, and contracts with group clients. Misapplying the recognition rules in any of these areas can distort your financial statements and create audit exposure. 

3. Cost Segregation and Depreciation Planning 

Hotel and resort properties typically contain a significant amount of personal property and land improvements that qualify for accelerated depreciation under a cost segregation study. By reclassifying building components into shorter depreciable lives, owners can generate substantial tax deductions earlier in the asset’s life, improving cash flow in the years that often matter most. 

For properties that have undergone renovation, a cost segregation analysis can also identify assets that were disposed of during the project, potentially generating additional deductions through partial asset dispositions. Given the scale of capital investment that most hospitality properties represent, this is one of the highest-value tax planning opportunities available. 

4. Labor Cost Management and Tip Reporting Compliance 

Labor is typically the largest expense category in a hotel or resort, often accounting for 30 to 40 percent of total revenue. Accounting for it accurately requires tracking wages, benefits, and tip income across a workforce that includes tipped employees in food and beverage, housekeeping, and front desk roles. 

Tip Reporting Compliance 

Tip reporting is an area where hospitality businesses face heightened scrutiny from the IRS. Employers must report and withhold on tips that employees receive and, in some cases, may be required to allocate additional tip income. Participation in programs like the Tip Rate Determination Agreement (TRDA) or the Employer-Designed Tip Reporting Alternative Commitment (EDTRAC) can provide some protection, but they require careful administration.  

Getting this right also directly affects your FICA tax credit eligibility under Section 45B, which allows employers to claim a credit for FICA taxes paid on employee tip income above the federal minimum wage. 

5. Management Fee and Franchise Agreement Accounting 

If your property operates under a management agreement or franchise agreement, the accounting treatment of those fees requires attention. Several distinct fee types and obligations commonly appear in these agreements, including: 

• Management fees are typically calculated as a percentage of revenue and sometimes a portion of operating profit 
• Franchise royalties and system fees paid to a brand 
• Performance pools and incentive fees 
• Capital expenditure reserve requirements 

Understanding exactly what you’re paying, how it’s calculated, and how it flows through your financials is important for accurate reporting and for evaluating whether your agreements are performing as intended. 

6. Seasonal Cash Flow and Capital Reserve Planning 

Most hotel and resort properties experience significant seasonality, and accounting systems that can’t support rolling cash flow forecasts and department-level budgets will leave you making decisions with incomplete information. Reserve fund requirements, often mandated by lenders or franchise agreements, add another layer of planning that needs to be integrated into your financial outlook. 

How BPM Can Help 

BPM works with independent hotel and resort owners, multi-property operators, and hospitality groups facing the financial and accounting complexities described here. BPM’s professionals understand hospitality metrics, from GOP and RevPAR to departmental P&Ls, and bring practical guidance on tax planning, financial reporting, and operational strategy. 

Whether you need support with cost segregation, outsourced accounting, audit and assurance, or technology systems built for multi-property operations, BPM can help you build the financial foundation your property needs. Contact BPM to start a conversation about your hospitality accounting needs.