Utilities — Schedule 9
Utilities are an essential component of any hotel’s operating expenses. Schedule 9 of the Uniform System of Accounts outlines the correct way to report utility-related costs, ensuring consistency and transparency across properties. While each hotel can remove irrelevant line items, the standard format does not allow for additional or substitute entries. However, detailed tracking is possible through sub-accounts, which can be summarized into the approved categories.
Let’s explore what makes up utility costs in a typical hotel operation.
📌 Electricity
This includes the total cost of electricity purchased from external providers. Charges may cover taxes, assessments, and any fees tied to bulk or forward contracts.
📌 Gas
Expenses for gas consumed on the property, whether for heating, cooking, or other uses, are recorded here. Like electricity, it includes related taxes and bulk purchase fees.
📌 Oil
The cost of fuel oil used in boilers, heating, or backup systems falls under this line item, inclusive of applicable assessments or taxes.
📌 Water and Sewer
Water usage and wastewater removal charges are captured here. This also includes expenses for water treatment or filtration. If the property operates systems like cogeneration or desalination plants, a separate internal schedule may be used, provided it’s summarized into this account.
📌 Steam
Properties that purchase steam—commonly used in central heating systems—should allocate those costs here, again including related fees and taxes.
📌 Chilled Water
This line item covers chilled water costs, often used in large-scale air conditioning systems. It includes additives and any charges from external suppliers.
📌 Other Fuels
Covers alternative fuels such as propane, diesel, solar, or geothermal energy. These may be niche, but properties using these sources should account for all related acquisition costs here.
📌 Contract Services
When a hotel brings in external specialists to improve energy efficiency—such as energy audits, thermal imaging, or water-saving initiatives—the cost is recorded here.
Total Utilities Expense
To determine the total cost of utilities, all of the above items are summed. These expenses are then expressed as a percentage of total operating revenue, giving a clear view of how much utilities impact the property’s overall financial health. This final number appears under the Undistributed Operating Expenses—Utilities section of the hotel’s summary operating statement.
