By David Lund
By someone’s estimate there are roughly one million hotels in the world. I take it that number includes all the different kinds of hotels from small inns and hostels all the way up to your full-service multi-outlet mega hotel operations. For simple math I am going to estimate that half of this number of hotels fall into the small inns and hostels, and that leaves 500,000 of what I’m going to call real hotels.
Of those 500,000 I am willing to bet that 50 percent do not know about or use “You Sally.” If we ramp that number up by multiplying the 250,000 real hotels by the average number of department managers, GMs and owners, let’s say 10 per property, we have roughly 2.5 million hotel management people that do not know about “You Sally,” Or, to express it properly, USALI “You Sally,” is an acronym that stands for the “Uniformed System of Accounts for the Lodging Industry.
I think it is time that everyone in our industry who considers themselves a real hotelier take up the cause and bring Sally into their world. Sally is unique and a gift that we can all benefit from. She not only has a lot of experience, she is also recognized around the world by brands, management companies, franchisors, banks and consultants as the authority when it comes to how you dress your financials.
USALI has been around for almost 100 years. She started out as a guidebook for the Hotel Accountants Association of New York City in the late 1920s. Since then she was adopted by the American Hotel Association and most recently by the association, Hospitality Financial and Technology Professionals or perhaps better known as HFTP.
She is the bible for the financial standards in the hotel industry. She lays herself out in nauseating detail and provides a solid and usable framework for our industry to follow when it comes to how we present financial information. She also gets around and keeps herself fresh and looking fine by getting a face lift and tummy tuck every 10 years or so. Did you know she is currently on her 11th edition?
She doesn’t come cheap though. A current 11th edition is several hundred dollars. The last time I checked on the big A (Amazon), she was listed for $850 for the hardcover and $250 for the paperback. Pro tip: Find the 10th edition or even the 9th and buy it used, you will save a fortune and the updates to the 11th easily can be found summarized online.
I work with many hoteliers to help them get their financial statements to work for them. Many of these businesses make three big mistakes that we need to correct, and we follow Sally’s framework when we build their new reporting system. This is not a difficult transition—from mistake to correction—but it is necessary if you want your business on a firm footing and especially if you’re looking for financing or investors.
The BIG three that hoteliers need today more than ever
- Hotel financial information must be organized and reported by department, rooms, F&B, MODs, A&G, S&M, POMEC. Not just all thrown together like baked spaghetti. This is what Sally’s all about. She puts things in order and makes sense of how your business is operating in a uniformed fashion so we can then compare our results to others.
- We must move to preparing the financial information monthly. Relying on annual financials and not how we move our business and the results forward. Professional hoteliers realize that being penny wise in this practice is POUND foolish. The ROI on any additional cost is extremely high. Pro tip: If your “accountant” says the monthly statements are a waste of time and money – it’s time to get a new accountant.
- With one and two in hand we must move to the accrual basis for reporting. This is like a Porsche 911 turbo compared to the Volks Beetle, no offence to Beetle lovers, I had one once and it was great, just too slow. Once we move away from the cash basis and we embrace the accrual method we now can see in real time what’s happening in our business.
If you are serious about running your business better and you realize that an investment in how you do this will generate superior results, then you’re ready for the big leagues. It’s not difficult to do this but having a guide can sure make your journey much smoother and faster. As for Sally, she is there to guide all of us to better reporting and to this we owe her a great deal of gratitude. I know other service industries are very jealous of her so we need to be thankful that we have her on our side.