Hotels, motels, and accommodation providers operate with a revenue model that creates several bookkeeping challenges not found in simpler service businesses: advance deposits collected weeks or months before the stay, cancellation fees with variable refund policies, high casual staff ratios with complex award coverage, consumable inventory across housekeeping, and point-of-sale reconciliation between the property management system and the bank. This guide covers the key areas.
Revenue Recognition: Advance Deposits and Cancellations
Advance deposits are one of the most frequently mishandled items in accommodation bookkeeping. When a guest pays a deposit for a future stay, that payment is not income at the time of receipt — it is a liability (deferred revenue) until the stay is delivered.
Under AASB 15 Revenue from Contracts with Customers, revenue is recognised when (or as) performance obligations are satisfied. For a motel booking, the performance obligation is providing the accommodation. Until the guest checks in and the stay commences, the deposit sits as a liability:
DR Bank [deposit received]
CR Advance Deposits Payable [deferred revenue liability]
When the guest checks in and the stay is delivered:
DR Advance Deposits Payable [deposit applied]
CR Accommodation Revenue [income recognised]
Cancellation fees — amounts retained when a guest cancels — are recognised as income at the time the cancellation occurs and the operator's right to retain the amount is confirmed. The bookkeeping entry:
DR Advance Deposits Payable [deposit forfeited]
CR Cancellation Fee Revenue [income recognised on cancellation]
Note that the GST treatment of cancellation fees is the same as for accommodation — the fee is a taxable supply and GST is included.
GST on Short-Stay Accommodation
Short-stay accommodation (stays of less than 28 consecutive days) is a taxable supply under the A New Tax System (Goods and Services Tax) Act 1999 — GST applies at 10%. This includes:
- Standard hotel and motel room tariffs
- Serviced apartment short stays
- Airbnb-style short-term rentals (if the host is registered or required to register for GST)
Long-stay accommodation (continuous stays of 28 days or more) is an input-taxed supply under s.40-35 of the GST Act. This means:
- No GST is charged to the guest
- The operator cannot claim input tax credits on expenses directly attributable to the long-stay portion
Operators with a mixed short-stay/long-stay portfolio must apportion their input tax credits between the taxable (short-stay) and input-taxed (long-stay) activities. A revenue-based apportionment is the most common method.
Ancillary revenue — food and beverage, car parking, conference room hire, laundry, pay TV — is generally a fully taxable supply at 10%.
Housekeeping and Maintenance Payroll
Accommodation operators typically have a high proportion of casual and part-time staff in housekeeping roles. The Hospitality Industry (General) Award (HIGA) is the predominant modern award covering housekeeping attendants, room attendants, and general maintenance staff.
Key payroll complexities under HIGA:
- Casual loading: 25% loading on the base rate for casual employees, in lieu of annual leave and personal leave entitlements
- Broken shifts: Split shifts with a break of more than 30 minutes attract a broken shift allowance; total time worked includes the break period for minimum engagement purposes
- Public holiday penalties: Double time or double time and a half depending on the day and the award clause — hotels operating 365 days a year have significant public holiday liability
- Superannuation: SGC applies at 11.5% (2024–25) for all eligible employees from their first dollar of earnings
Rostering software that feeds into payroll is essential for accommodation operators — manual timesheet entry for a multi-shift casual workforce is a common source of payroll errors.
Linen, Consumables, and Inventory
Hotels and motels purchase linen (sheets, towels, pillow slips), guest consumables (toiletries, tea and coffee, stationery), and cleaning supplies as part of their operating costs. These are typically expensed as purchased rather than tracked as stock (consumable store), unless the operator is large enough to carry significant inventory values.
Where linen inventory is material, a periodic stocktake should be conducted and the movement in linen stock recognised as a cost of sales adjustment. Write-downs for damaged or lost linen are an operating expense.
For input tax credit purposes, all consumables purchased for use in making taxable short-stay accommodation supplies are 100% creditable (subject to the apportionment method for any long-stay portion).
POS System Reconciliation to Bank
Most accommodation properties use a property management system (PMS) — such as RMS Cloud, Little Hotelier, or Cloudbeds — that generates a daily revenue reconciliation report. The PMS records room revenue, food and beverage transactions, ancillary charges, and payment methods (cash, EFTPOS, credit card, OTA pre-payment).
Reconciling the PMS to the bank account is a daily or weekly task:
- EFTPOS settlements: Typically settled next business day net of terminal fees (the terminal fee is a bank charge, not netted from revenue)
- OTA (Online Travel Agency) payments: Bookings.com, Expedia, and similar platforms typically remit net of commission — the gross room revenue and the commission expense should both be recorded, not just the net cash received
- Cash receipts: Daily reconciliation of cash received against the PMS cash payments log and the physical float count
ReconLink's statement import (CSV, Excel or PDF, or forwarded to a per-client email inbox) and rule-based coding handles the settlement entries from merchant terminals and OTA remittances efficiently once the initial coding rules are configured, reducing daily reconciliation time substantially for operators on traditional manual processes.
State Tourism Levies
Several Australian states impose tourism-related levies on accommodation operators:
- Queensland: Accommodation Levy (introduced in some local government areas) — collected from guests and remitted to the council or state body
- Western Australia: City of Perth accommodation levy
- Melbourne: City of Melbourne Tourist Accommodation Levy (if enacted — confirm current status)
These levies are not GST — they are separate charges collected on behalf of the state or local government and must be coded separately from GST. The levy collected from guests is a liability until remitted; it is not income of the operator.
Legislation and Further Reading
- A New Tax System (Goods and Services Tax) Act 1999, s.40-35 — input-taxed residential accommodation
- AASB 15 Revenue from Contracts with Customers — revenue recognition, advance deposits
- Hospitality Industry (General) Award 2020 — staff entitlements
- Superannuation Guarantee (Administration) Act 1992 — SGC obligations
- ATO: GST and residential accommodation (www.ato.gov.au/Business/GST/In-detail/Your-industry/Property-development-and-building/Residential-accommodation/)
- Fair Work Commission: Hospitality Industry (General) Award pay guide