Which financial statement is considered a key performance indicator in the hotel industry?

The income statement is known as a key performance indicator in the hotel industry because it provides a clear picture of the hotel's operational performance over a specific period. This financial statement details revenues, expenses, and profits, allowing stakeholders to understand how effectively the hotel is generating income through its operations.

In the context of hotel management, the income statement highlights vital metrics such as revenue per available room (RevPAR), average daily rate (ADR), and occupancy rates, all of which are crucial for assessing the hotel's performance within the competitive landscape. Analyzing the income statement helps management make informed decisions regarding pricing strategies, cost control, and overall business performance.

Other financial statements mentioned, like the balance sheet, cash flow statement, and statement of retained earnings, do play essential roles in the financial analysis of a hotel. However, they do not focus on operational efficiency and profitability to the same extent as the income statement does, which is why the income statement stands out as the primary key performance indicator for evaluating success in the hotel industry.