A Deep Dive into Changes

in the New Edition

A Focus on Increased Transparency
 Summary of Changes
Major Changes:
• Part I Operating Statements
• Rooms – Schedule 1
• Executive/Club Lounge Cost Schedule – 1-1, NEW
• Energy, Water, & Waste – Schedule 9, NEW
• Payroll FTE – Schedule 15, NEW
• Annual Schedule of Mandatory Brand & Operator Costs –
Schedule 16, NEW
• Part II All Inclusive, New
• Part VI Revenue and Expense Guide, Moved Online
 Summary of Changes

Clarifications and Updates:

• Part I Operating Statements
• Miscellaneous Income – Schedule 4
• Sales and Marketing – Schedule 7
• Non-operating Income and Expenses – Schedule 11
• Part III Other Reporting Guidance
• Part IV Financial Statements
• Part V Metrics, Ratios, and Optional Schedules
 Summary of Changes

Minor Changes:
• Part I Operating Statements
• Food and Beverage – Schedule 2
• Other Operated Departments – Schedule 3
• Administrative and General – Schedule 5
• Information and Telecommunications Systems – Schedule 6
• Property Operation & Maintenance – Schedule 8
• Payroll Related Expenses – Schedule 14
 Summary of Changes

No Changes:
• Part I Operating Statements
• Management Fees – Schedule 10
• House Laundry – Schedule 12
• Staff Dining – Schedule 13
Publication:
• E-book – Q2, 2024
• Soft Cover Book – Q2, 2024

Effective Date: January 1, 2026

A word or two about GAAP
Uniform System of Accounts for the Lodging Industry
USALI does not define the accounting principles generally accepted in the United States
(GAAP), or internationally under the International Financial Reporting Standards (IFRS).
USALI provides guidance for standardized financial reporting and analysis, critical for
effective management and benchmarking, that is intended to be consistent with GAAP
with reference to IFRS.
USALI Reporting includes many non-GAAP terms, such as:
• Gross Operating Profit (GOP)
• Earnings before Interest, Taxes, Depreciation, and Amortization (EBITDA)
Ownership and Update Process
 Ownership

In 2018, HFTP acquired the copyright to the USALI, which was

previously owned by the Hotel Association of New York City.
HFTP’s purpose is “to lead and advance the hospitality profession by providing a
forum for continuous learning and knowledge sharing.”
HFTP’s goal is to leverage its resources, as an international organization, to drive
greater global adoption of the USALI.
"With the new ownership responsibility, HFTP continues to prioritize the evolution of
the USALI through continuous updates to USALI guidance to reflect the changing
nature of the hospitality Industry.”
 Global Finance Committee
The Global Finance Committee (GFC) was formed by HFTP and
AHLA to update and maintain the USALI based on U.S. GAAP
with consideration of IFRS.
The GFC is comprised of financial leaders from the largest U.S.
and international hotel brands, operators, and owners.
Diverse and balanced membership:
• Owners, owner representatives, and asset managers
• Brands, operators, and management companies
• Educators, public practice, consultants, and reporting firms
 USALI Development Process

Updates initiated by:

• Formal changes in accounting pronouncements (U.S.
GAAP, IFRS, Regulatory Environment) and industry
stakeholder input.
• GFC meetings began in 2019
• Industry exposure drafts period began in December 2021
• Publication of 12th Revised Edition e-book and soft cover
book is scheduled for Q2, 2024.
• Effective date is January 1, 2026
 USALI Development Process

Overall philosophies:
• U.S. GAAP guided with references to IFRS.
• USALI format should be used for presentation of operational
and management reporting financial statements.
• Many contractual agreements require definitions or
calculations which originate with the USALI.
• No (or limited) options to avoid ambiguity = conformity.
 Major Changes
Part I Operating Statements
Rooms – Schedule 1
 Rooms Revenue Segmentation

• The definitions for each of the rate categories used to segment

Rooms Revenue have been expanded.
• Discount — Transient Segmentation: A rate open to the general
public (non-qualified) under which the guest pays less than the
Retail rate. Examples include advance purchase, packages,
promotions, as well as OTA discounts, promotions, and opaque.
 Rooms Revenue Segmentation

• Negotiated: A rate negotiated with special (typically corporate) accounts.

Identification with a particular company, organization, or consortia is required to
obtain this rate. This includes government contractors and other companies that
negotiate rates to per diem
• Qualified: A rate that requires the customer to be associated with a particular
organization or to have a specific affiliation in order to book. Identification is
required upon check-in. This includes loyalty redemptions and offers outside of
the basic member rate. Other examples include senior citizen, AAA/motor
clubs/travel associations, government, friends and family, and employee rates.
 Guest Loyalty Program Costs

New guidance to enhance the transparency associated

with the costs of services and amenities provided to
participants of a guest loyalty program(s).
 Guest Loyalty Program Costs

Expanded guest loyalty program accounts:

• Loyalty Program Member Benefits (Rooms – Schedule 1) – Cost incurred by hotels
to provide member benefits (e.g., concierge lounge F&B, labor).
• Service Recovery (A&G – Schedule 5) – Points to guests to remediate service issues.
• Loyalty Program Costs (Sales and Marketing – Schedule 7) – Assessments to hotels
for points earned from purchases and opting out of services (e.g., housekeeping).
• Loyalty Promotion Costs (Sales and Marketing – Schedule 7) – Cost of points for
specific promotions (e.g., double points, airline promotions).
 Guest Loyalty Program Costs
Loyalty Program Member Benefits:
• Includes on-property costs to deliver benefits to loyalty
program members pursuant to the terms of the loyalty
program (e.g., complimentary items such as water, breakfast,
concierge lounge access as outlined herein, incremental
payment to third parties for benefits provided such as parking).
• If a guest opts to receive points instead of other on-property
benefits, the cost of those points is recorded in this account.
• Costs of services and amenities that are available to all guests,
such as items required by brand standards, should be reflected
in their relevant operating departments and accounts.
 Executive Lounge Revenue

• Executive Lounge Revenue. Revenue associated with the

purchase of access to a designated private space within the
hotel commonly referred to as a club, concierge, or
executive lounge, if material, is recorded in this
classification of Other Rooms Revenue.
• The amount of the revenue is equal to the amount of the
upcharge or room premium charged to access the space.
• Any ancillary revenue generated in the executive lounge
such as alcohol sales or meeting room rental should be
recorded in the appropriate department.
 Executive Lounge Expenses

• Executive Lounge Expense. If Executive Lounge Revenue is

recorded, the allocation of Executive Lounge operating
expenses attributable to guests who paid for access to the
lounge via an upcharge or room premium is recorded here.
• The amount recorded in Executive Lounge Expense is an
allocation from Executive Lounge – Schedule 1-1; the
balance is recorded in Loyalty Program Member Benefits.
 Rooms –Schedule 1, New Accounts

• Executive Lounge Expense

• Loyalty Program Member Benefits
Executive Lounge
Schedule 1-1
 Executive Lounge – Schedule 1-1

• New schedule to provide greater visibility of the costs

associated with maintaining an executive lounge program.
• The Executive Lounge Cost schedule is similar in detail to the
Food and Beverage department, outlet, or venue schedule.
Executive Lounge
Schedule 1-1
Costs
Executive Lounge
Schedule 1-1
Costs (cont.)
 Executive Lounge – Schedule 1-1

• The Executive Lounge costs are allocated to either:

• Rooms – Schedule 1, Executive Lounge Expense (only if Executive
Lounge Revenue is recorded), or
• Rooms – Schedule 1, Loyalty Program Member Benefits, the
residual
• New titles: Executive lounge manager, service staff such as attendant,
server, bartender, bus person, runner, and guest relations for the
executive lounge.
Energy, Water, and Waste
(EWW) – Schedule 9
 Background
• As the world advances on environmental and sustainability, the
lodging industry need to catch up.
• First of many steps, as environmental and sustainability objectives and
measures will continue to change with the needs of our planet.
• Hotels are increasingly required to report to customers, investors, and
regulators on their sustainability initiatives. This new reporting
standards will serve as a common benchmark for the lodging industry.
• Cooperative effort of HFTP and AHLA. Members of the GFC include
the major hotel brands, managers, owners, and advisors.
• GFC solicited feedback from industry leaders on sustainability and
environmental reporting, including Greenview.
 The Need to Advance

• Energy, Water, and Waste (EWW) need to be consolidated in one place

for hotels to accurately record all related expenses.
• Consumption tracking necessary to support Scope 1 and Scope 2
reporting included in Part V, Metrics, Ratios, and Optional Schedules
• Standardized metrics for hotels of all sizes.
 Interested Parties

• Corporate travel planners and individual travelers increasingly are asking

the question of what a hotel is doing to reduce its carbon footprint.
• Disclosure is required in many RFPs, impacting large, medium, or small
operations (MICE, SMURF, government and corporate travel)
• Impacts both brand and independent operators
• Government agencies for regulatory purposes
 Significant Changes

• Reclassifying waste expenses from the Property Operations and

Maintenance Schedule to the Energy, Water, and Waste (EWW)
Schedule.
• Expanding Energy, Water, and Waste with more detailed accounts
and descriptions.
• New EWW metrics to record and align consumption reporting with
Scope 1 and Scope 2 Green House Gas reporting requirements
 EWW
Schedule 9
 Fuels, Gases, and District Energy

• The cost of fuels, gases, and district energy used in lodging properties is
charged to this account and would include taxes or assessments and any bulk
or future purchase fees or allocations. Below are the common fuels and gases
classifications:
* Natural gas * Propane
* Fuel oil * Purchased/district chilled water
* Other * Purchased/district hot water/steam
• Lodging properties may choose to create subaccounts for these to track usage
 Renewable Energy

• Cost of renewable energy (e.g., solar and wind), either purchased

from outside producers or generated, is charged to this account and
would include the cost of renewable attributes (e.g., renewable
energy certificates or guarantee or origin), any taxes or assessments
and any bulk or future purchase fees or allocations.
• Does not include capital expenditures for installing onsite renewable
energy sources
 Metrics
• Hotels come in different sizes, and resources to monitor and understand all
regulations vary from property to property.
• Metrics such as energy consumption per occupied room (POR), water consumption
POR, and waste production POR are important to understand and reduce a hotel’s
utilities cost and environmental impact.
• Establish a baseline from which to monitor and track the environmental
components necessary to understand its impact.
• For hotels that are part of a brand, these companies will typically support the
calculation within their global brand databases and are being contacted by clients
for information on hotels within their respective brand.
 Cost and Consumption Metrics
• Cost Metrics
1. Energy Cost per kWh
2. Water Cost per gal or m3
3. Waste Cost per lb or kg
• Consumption Metrics
1. Energy (kWh) used per square feet/meter (“Energy PSF” or “Energy PSM”)
2. Water (gal or m3) consumed “Water POR” or “Water PAR”
3. Waste (lb or kg) generated “Waste lb POR” or “Waste kg POR”, or “Waste
lb PAR” or “Waste kg PAR”
• Carbon Emissions, Carbon Footprint, or Green House Gases
Payroll FTE - Schedule 15
 Increased Transparency

• Intended to provide greater visibility of

FTEs in each department.
• Categorizing management versus
non-management.
 Payroll FTE
Schedule 15
 Payroll FTE
Schedule 15
(cont.)
Annual Mandatory Brand and
Operator Costs – Schedule 16
 Annual Mandatory Brand and
Operator Costs– Schedule 16

Intended to provide greater visibility of costs

required by a brand or operator
• Prepared once a year in conjunction with the fiscal
year-end reporting package.
• Includes non-negotiable costs for mandatory
programs, systems, and services.
• Prepared for information purposes; costs may not
be comparable to similarly titled classifications and
should not be relied upon for benchmarking.
 Annual Mandatory Brand and
Operator Costs– Schedule 16
• Brands and operators often combine reservation, marketing, central
information system, and administrative support assessments into bundled
program charges
• Preparer should seek guidance from the brand or operator regarding the
estimated allocation of the bundled program charges.
• Unallocated bundled program charges go to Franchise and Affiliation
Marketing
• Excludes third party ‘pass-through’ costs, such as travel agent commissions,
business intelligence services, etc.
 Annual
Mandatory
Brand and
Operator Costs –
Schedule 16
 Annual Mandatory Brand and
Operator Costs– Schedule 16

• Costs are separated into four sections

• Rooms
• Sales and Marketing
• Information Technology
• Programs, Systems and Services
• Costs may not be compatible to similarly titled classifications
and should not be relied upon for benchmarking purposes.
 Annual Mandatory Brand and
Operator Costs– Schedule 16

Rooms includes:
• Reservations (includes mandated costs for brand or
operator central reservation system).
• Other (including complimentary food and beverage and
on-property costs for loyalty program member benefits).
 Annual Mandatory Brand and
Operator Costs– Schedule 16

Sales and Marketing includes:

• Revenue management services
• Franchise and affiliation marketing and royalties
• Loyalty program costs and promotional costs
• E-commerce and digital marketing
• Other sales and marketing
 Annual Mandatory Brand and
Operator Costs– Schedule 16

Information and Technology includes:

• On-property revenue systems
• Property IT support
• Centralized information systems
• Information security programs
• Other information technology costs
 Annual Mandatory Brand and
Operator Costs– Schedule 16
Programs, Systems and Services includes:
• Human resource and payroll systems
• Risk management program
• Procurement
• Other HR services
• Base and incentive management fees
• Centralized accounting services
• Ancillary accounting services
• Other programs, systems, and services
 Major Changes
Part II All Inclusive
 All Inclusive

New section includes reporting guidance for All Inclusive (AI) hotels.
• Required for hotels with AI package revenue greater than 50 percent of Total
Revenue calculated on a three-year rolling average and newly opened hotels
forecasting AI package revenue greater than 50 percent of Total Revenue.
• Hotels not meeting this threshold would report using existing EP guidance.
• Overall, AI guidance is conceptually consistent with EP hotels.
 All Inclusive

AI Package Revenue vs. EP Package Revenue:

• AI hotels charge a package rate that includes room,
food and beverage, and entertainment for a set rate.
• EP hotels offer room-only rates, plus options to
purchase food and beverage and other services à la
carte, or as a package at the guest’s discretion.
• AI and EP services charges are treated differently.
 All Inclusive
Revenue:
• Package Revenue
o Not allocated to each of the services within the guest’s
package (e.g., rooms, food and beverage, and
entertainment) but rather is reported in total.
o Given different statutory requirements across the globe,
additional schedules may be required for local reporting
• Non-package Rooms Revenue
• Non-package Revenue
• Miscellaneous Income
 All Inclusive
Schedules:
• Package Revenue – AI 1
• Non-Package Rooms Revenue – AI 2
• Rooms Expense – AI 3
• Food and Beverage Expense – AI 4
• Entertainment – AI 5
• Non-Package Revenue and Expense Summary – AI 6
o Food and Beverage – AI 6-1
o Weddings – AI 6-2
 All Inclusive

AI Metrics:
• Package ADR
• Package RevPAR
• Total Guests in House
• Package Revenue per Guest
• Average Package Room Rate
For purposes of the financial ratios and metrics, all
guests are counted equally (e.g., adults and children)
 Major Changes
Part VI Revenue and
Expense Guide
 Revenue and Expense Guide

“Alpha” sort by Item included in the text

Supported by a dedicated, searchable, online platform

 Clarifications
and Updates
Part I Operating
Statements
Miscellaneous Income
Schedule 4
 Miscellaneous Income – Schedule 4

Clarifications and Updates

• Enhanced guidance regarding proper classification of lease revenue
received from food and beverage outlets.
• Resort Fees has been changed to Destination, Resort, and Urban Fees
• Enhanced guidance and reporting are provided for:
Cleaning Fees for hotel rooms
Guest-Related Foreign Currency Transaction Gains (Losses)
Pet Fees (should be the same as Cleaning Fees for Hotel Rooms)
Promotional Credits
Space Rental and Concessions
 Miscellaneous Income – Schedule 4
Clarifications and Updates
Cleaning Fees for hotel rooms. If cleaning fees are charged as a penalty,
such as cleaning for smoking in a non-smoking room, or any type of
extraordinary cleaning, restoration or repair from room damage
(including pet damage), etc., those fees are included as Miscellaneous
Income (not Room or Other Room Revenue).
Guest-Related Foreign Currency Transaction Gains (Losses). Any
difference between the amount of foreign currency received from the
customer and the actual rate at which that currency is exchanged would
be included as a part of this gain or loss.
 Miscellaneous Income – Schedule 4
• Space Rental and Concessions. Includes the revenue generated from these rental
agreements within the property. Examples can be food and beverage venues,
gifts shops, coffee kiosks, and car rental agencies that lease space from the hotel.
• The amount paid by tenants entering into leases with the property is amortized
over the term of the lease and reported in Miscellaneous Income.
• Rental revenue earned from commercial leases initiated by the owner, not
directly associated with the operation of hotel, and requiring no involvement
from hotel management should be reported on Non-operating Income and
Expenses — Schedule 11.
• Promotional Credits. Credits issued to a guest to use during a stay across a
hotel’s facilities and amenities should be treated on a net revenue basis. Credits
do not go against Room Revenue, but instead should run through a contra
revenue account in Other Miscellaneous Department.
Miscellaneous Income
Schedule 4
Sales and Marketing
Schedule 7
 Sales and Marketing – Schedule 7

Significant changes:
• Modernized to incorporate recent changes and emerging trends in marketing
systems and tools, CRM systems, and sales channels.
• Various clarifying changes for new types of expenses and to address user questions
and feedback as well as conforming changes for common expense categories.
• New job titles and accounts added to reflect increased use of digital marketing
roles and tools such as director of commercial services, social media coordinator,
social media analyst, and sales coordinator.
 Sales and Marketing – Schedule 7

New accounts:
• Advertising, Print, Radio, and Television
• Digital – Paid Search
• Digital – Display
• Digital – Social
• Loyalty Program Costs
• Loyalty Program – Promotion Costs
• Marketing Agency Fees
• Photography and Videography
• Printed Collateral
 Sales and Marketing – Schedule 7

Expanded guest loyalty program accounts:

• Loyalty Program Costs (Sales and Marketing – Schedule 7) — Assessments
to hotels for points earned from purchases and opting out of services
(e.g., housekeeping).
• Loyalty Promotion Costs (Sales and Marketing – Schedule 7) — Cost of
points for specific promotions (e.g., double points, airline promotions).
• Loyalty Program Member Benefits (Rooms – Schedule 1) — Cost incurred
by hotels to provide member benefits (e.g., concierge lounge F&B, labor).
• Service Recovery (A&G – Schedule 5) — Points to guests to remediate
service issues.
 Sales and Marketing – Schedule 7

Clarification example:
• Marketing Agency Fees. Includes fees paid to advertising, digital, social or
public relations agencies.
• Marketing Agency Fees. Includes fees paid to advertising, digital, social or
public relations agencies. This does not include the cost of the item or
product purchase such as the ad, brochure, PPC, etc.
 Sales and Marketing – Schedule 7

Clarification example:
• Printed Collateral. Includes the cost of printing brochures, salespersons’ kits,
maps, floor plans, and similar materials used to describe the property’s services.
• Printed Collateral. Includes the cost of printing brochures, sales kits, maps, floor
plans, and similar materials used to describe or promote the property’s services,
facilities, or amenities.
 Non-operating
Income and Expenses
Schedule 11
 Non-operating Income and
Expenses – Schedule 11
Significant changes:
• The addition of Leasing Income to capture lease income generated by the facility
that is associated with leasing activity managed by the Owner (including
common area maintenance (CAM) recoveries).
• Clarification that Cost Recovery Income represents income collected from third
parties for the recovery of CAM and out-of-pocket expenses for leases managed
by the operator. Similarly, Costs Recovery Expenses was clarified to relate to
recoverable expenses under leases managed by the operator.
• Clarification that Business and Occupation Taxes include gross receipts taxes on
revenues and other direct taxes.
 Non-operating Income and
Expenses – Schedule 11
Significant changes:
• Pre-opening Expenses has been added as an Other expense to be consistent
with the requirements of U.S. GAAP.
• Unrealized Investment Gains or Losses has been added as a caption to record
the associated unrealized gains or losses for (1) Investment properties electing
the fair value model under IFRS and (2) Equity investments that have readily
determinable fair values consistent with the requirements of U.S. GAAP.
• Rent was updated to reflect the changes in lease accounting under U.S. GAAP
and IFRS.
 Non-operating Income and
Expenses – Schedule 11

New accounts:
• Lease Income
• Pre-Opening Expenses
• Unrealized Investment Gains or Losses
 Clarifications
and Updates
Part III Other
Reporting Guidance
 Part III Other Reporting Guidance

• Decision Trees and Flowcharts

o Food and Beverage Venue, Other Operated, Minor Operated
o Contracted, Leased and Outsourced; Cluster; Contract Services
• Gross vs. Net Reporting
• Forgivable Loans
• Wage Subsidies and Grants
• Third Party Use of Hotel Assets
• Lease Accounting – Right of Use Assets
• Embedded Lease Arrangements
 Part III Other Reporting Guidance
Contracted, Leased, and Outsourced Labor
• Includes the gross cost of contracted, leased, and outsourced labor incurred when
a property enters into an agreement with an unrelated third-party contractor to
provide workers to fill positions that would normally and frequently be held by
individuals paid on the regular payroll. In these situations, the property records
the gross labor cost and when available should record hours worked.
• For clarity, positions that are normally and frequently held will be determined by
the needs of the property. If the property would have to contract a full-time
employee to perform the tasks, it would be Contracted, Leased, and Outsourced
Labor and if not, it would be Contract Services.
 Part III Other Reporting Guidance

Contract Services
• Includes expenses for activities performed for the department by outside
contractors and professional service providers rather than by hotel
employees, unless identified in this department with a specific line item,
such as Laundry and Dry cleaning.
• If supplies are purchased for contract companies to use, the supplies are
charged to the appropriate supply account.
 Decision
Tree

Contracted, Leased
and Outsources
Labor, Cluster
Services, and
Contract Services
 Part III Other Reporting Guidance

Gross vs. Net Reporting

Updated to take into consideration ASC 606 Revenue Recognition
and IFRS 15 Revenue from Contracts with Customers.
• Based on Principal or Agency relationship
• Specific goods or services
• Who controls the specific goods or services before they are
transferred to the customer
 Part III Other Reporting Guidance

Forgivable Loans, Wage Subsidies and Grants, and Third-party Use

of Hotel Assets
• Based on the Supplemental Guidance developed during the Covid pandemic
• Continued relevance in the face of natural disasters, international armed
conflict, other states of emergency or economic downturn
• Recognition is based on determination of Principal vs. Agency and
Foreseeability
• Reporting considerations
 Part III Other Reporting Guidance
Lease Accounting
Updated to take into consideration ASC 842 Leases and considers IFRS 16 Leases
• Applicable to all Right of Use Assets
• Lease (Right of Use) Liability reported on the balance sheet, and amortized
based on effective interest rate
• Lease (Right of Use) Assets reported on balance sheet, and amortized as
appropriate to Depreciation amd Amortization, or Non-operating Income
and Expenses – Schedule 11, Rental Costs
• ASC 842 considers Operating and Financing Leases, whereas IFRS 16
considers a single lease model
 Part III Other Reporting Guidance
Embedded Lease Arrangement
Embedded leases may exist in a service contract or contractual obligation when the
contractual obligation provides for or includes the exclusive use of identifiable
assets through the contract period.
Determination of the existence of an embedded lease arrangement:
• Determination of an identified asset
• Flow of economic benefits
• Right to direct use
If there is an embedded lease, payments must be allocated between operating
costs and the rent to use the identified asset on a market value basis.
 Clarifications
and Updates
Part IV Financial
Statements
Balance Sheet
 Balance Sheet

Significant changes:
• A general reminder was added to highlight that not all assets and liabilities are
accounted for by the hotel manager and that delineation of responsibility
between hotel manager and hotel owner is of paramount importance.
• Deferred Income Taxes – Current assets and liabilities have been removed to be
consistent with the requirements of U.S. GAAP. All Deferred Income Tax assets
and liabilities are to be reflected as noncurrent under U.S. GAAP.
 Balance Sheet

Significant changes:
• Unrealized Gains or Losses has been added as a caption to record the
associated unrealized gains or losses for (1) Investment properties electing
the fair value model under IFRS , and (2) Equity investments that have readily
determinable fair values, consistent with the requirements of U.S. GAAP.
• Right of Use (ROU) Asset, Lease Liability – Current and Lease Liability –
Noncurrent are added as balance sheet captions to reflect the changes in
lease accounting under U.S. GAAP and IFRS.
 Balance Sheet

Significant changes:
• Pre-opening Expenses has been removed to be consistent with the
requirements of U.S. GAAP.
• Key Money was added as an Other Long-term Liability caption given
its increased occurrence in practice.
• Cash Surrender Value of Life Insurance was eliminated as a separate
balance sheet caption given its limited occurrence in practice.
 Balance Sheet

New accounts:
• Unrealized Gains or Losses
• Right of Use Assets
• Lease Liabilities – Current
• Lease Liabilities – Non-current
• Key Money
 Balance Sheet
Other Financial Statement Changes
• Changes due to GAAP/IFRS updates
• Flow through of changes in USALI (e.g., Utilities to EWW)
• Clarifications on Statement of Income for consolidation of income taxes
• Updating account names on Statement of Comprehensive income (e.g.,
Designated derivative instrument adjustment)
• Updating “Unrealized Gains on Available-for-sale debt securities” in
Statement of Comprehensive Income
• Additional examples included in the Statement of Cash Flows
 Clarifications
and Updates
Part V Metrics,
Operating Ratios, and
Optional Schedules
 Energy, Waste and Water

Cost Metrics
• Energy Cost per kWh
• Water Cost per gal or m3
• Waste Cost per lb or kg
 Energy, Waste and Water

Consumption Metrics
• Energy (kWh) used per sq. ft./m. (“Energy PSF” or “Energy PSM”)
• Water (gal or m3) consumed per available room night (“Water PAR”)
• Water (gal or m3) consumed per occupied room night (“Water POR”)
• Waste (lb or kg) per available room night (“Waste lb PAR” or “Waste kg PAR”)
• Waste (lb or kg) per occupied room night (“Waste lb POR” or “Waste kg POR”)
 Labor Costs

Overtime Salaries and Wages — Management

The total portion of wages for any hours that were compensated above
the base rate of pay for non-exempt managers (e.g. if the base rate of pay
for a non-exempt manager is $30 and one hour of time and a half overtime
was paid, $15 should be recorded in the Overtime Statistics chart).
Overtime Hours — Management
Only hours worked that were compensated above the base rate of pay for
non-exempt managers, as applicable.
 Labor Costs

Overtime Salaries and Wages — Non-management

The total portion of wages for any hours that were compensated above the
base rate of pay for non-management employees. (e.g. if the base rate of
pay is $20 and one hour of time and a half overtime was paid, $10 should
be recorded in the Overtime Statistics chart).
Overtime Salaries and Wages — Non-management
Only hours worked that were compensated above the base rate of pay for
non-management employees.
 Labor Costs

Total Payroll Related Expenses as a % of Total Salaries and Wages

Payroll Related Expenses include payroll taxes, supplemental pay and employee
benefits. These costs should be measured as a percent of Total Salaries and Wages
to evaluate the full cost of employees and not just the Total Salaries and Wages.

Total Payroll Related Expenses as a % of Total Salaries and Wages

Total Payroll Related Expenses
Total Salaries and Wages
 Labor Costs

Hourly Average Wage Rate

The Hourly Average Wage Rate is used to evaluate the average cost per hour
for only non-management employees. This metric is useful in comparing
department costs or profitability between hotels as it’s impacted by
geographical location, employee tenure and labor negotiations.

Hourly Average Wage Rate

Non-management Wages
Hours Worked
 Other – Rooms

Loyalty Member Contribution Rate

This statistic captures the room mix associated with a hotel’s loyalty program. It is
calculated as the total number of rooms occupied by loyalty members earning or
redeeming points specific to room nights as a percentage of total number of
rooms sold.
Loyalty Member Contribution Rate
# Rooms Occupied by Loyalty Members Earning or Redeeming Points
Rooms Sold
 Other – Rooms

Day Use Rooms Sold

Rooms that are sold for a non-overnight stay and at a rate not offered by the
hotel to regular revenue segments (i.e., transient, group, or contract). With that,
the Day-use Guests Count and the Day-use Occupancy % are also included.

Occupancy % Day Use

Day Use Rooms Sold
Rooms Available
 Other – Food and Beverage

Turns
The number of times all available seats are reset and sold to another dining party.
Turns Per Meal Period by Venue
The number of times a venue turns all available seats during a specific meal period.
This operating ratio reveals the number of times a venue resets and sells all
available seats during a specific meal period
Total Customers Per Venue by Meal Period
Number of Available Seats
 Other – Food and Beverage

Food and Beverage Revenue Per Hour Worked

Food and Beverage revenue per hour worked is used to evaluate labor
efficiency in Food and Beverage departments. This metric provides more
consistency in comparison to other metrics using customers or covers.

The Food and Beverage Revenue Per Hours Worked

Food and Beverage Sales
Total Hours worked
 Other – Spa

Spa Occupancy (Utilization)

Spa Occupancy ratio measures the success of the spa operation
in selling treatment services based on available capacity.

Spa Occupancy
Hours of treatment sold
Hours of treatment available
 Other – Spa
Average Treatment Rate (ATR)
The Average Treatment Rate is the treatment revenue for a period of time
(e.g. daily, weekly, monthly) divided by the number of treatments sold
over that same period. The Average Treatment Rate can be impacted by
day of week, types of treatments sold and demand. Average Treatment
Rate is a good indicator when using a dynamic pricing strategy in the spa.

Average Treatment Rate

Total Treatment Revenue
Number of Treatments
 Other – Spa

Revenue Per Available Treatment Hour (RevPATH)

Spa Revenue per Available Treatment Hour (RevPATH) measures the spa revenue
yield a spa achieves relative to the number of treatment rooms available and
hours of operation for a period. RevPATH includes the influence of two factors:
Spa Occupancy and ATR. RevPATH can be used to compare spa revenue results
with prior period results or to compare actual to budgeted results.
RevPATH
Spa Occupancy x Average Treatment Rate
 Transient Rooms Revenue by Segment

Optional Reporting
Offers management and owners more detailed categorization
of the sources of their transient revenues. Five categories:
1. Retail
• OTA — Retail Model
• OTA — Merchant Model
• Loyalty Member Retail Discount.
• Consortia
• Other
Transient Rooms Revenue by Segment

2. Discount
• Advanced Purchase
• Packages
• Promotions
• OTA Opaque
• Other
 Transient Rooms Revenue by Segment

3. Qualified
• Government
• Membership Clubs
• Loyalty Member Redemptions
• Employee, Friend and Family Rate
• Other
4. Negotiated
5. Wholesale
 Rooms Revenue by Channel

Optional Reporting
Concentrates on the booking mechanisms by which our guests select their stay
with our properties.
Eight Channels
* Brand.com/Brand Mobile Apps * Property Direct
* Mirrored Brand Direct * Voice
* Global Distribution System * Wholesale Direct Connect
* Online Travel Agents * Other
 Minor Changes
Part I
Operating Statements
Food and Beverage
Schedule 2
 Food and Beverage

Outlet vs. Other Operated Department

Enhanced guidance will help users determine if a retail operation selling
food and beverages should be considered Food and Beverage Revenue
or Other Operated Department Revenue.
Food and Beverage Outlet Determination
 Food and Beverage

Outlet vs. Other Operated Department

• Based on the preceding flowchart the Mini Bar would no longer be
considered a food and beverage outlet; and because of the lack of direct
labor would most likely be classified as a Minor Operated Department.
• In the 12th Revised Edition, Mini Bar is no longer classified as a Food and
Beverage Outlet.
Other Operated Departments
Schedule 3
 Other Operated Departments

Other Operated vs. Minor Operated Department

Enhanced guidance will help users determine if a revenue
activity should be classified as an Other Operated or a
Minor Operated Department.
Other vs. Minor Operated Departments
Administrative and General
Schedule 5
 Administrative and General

Changes and Clarifications

New Accounts
• Human Resources – Recruitment/Relocation
• Human Resources – Employee Relations
• Provision for Doubtful Accounts
• Service Recovery
 Administrative and General

Changes and Clarifications

Human Resources – Recruitment/Relocation. Includes all costs directly related
to the recruiting function of human resources, such as recruitment, relocation,
background checks, non-legal cost of visa for an ex-pat employee, employee
temporary housing, physician fees and medical supplies, and all expenses
associated with the cost of house media, social and sports activities. If these
expenses are significant, a property may develop a sub-schedule to provide
more detail, but the sub-schedule total must roll up into this line item.
 Administrative and General

Changes and Clarifications

Human Resources – Employee Relations. Includes all costs directly
related to the retention and engagement of associates including
employee awards and events and activities intended to improve
employee relations and morale. If these expenses are significant, a
property may develop a sub-schedule to provide more detail, but
the subschedule total must roll up into this line item.
 Administrative and General

Changes and Clarifications

Provision for Doubtful Accounts. Includes any charge made to provide for the
probable loss on accounts and notes receivable including credit card
chargebacks. Likewise, if a customer disputes a no-show charge on its credit
card that the hotel wants to collect and that charge is reversed, then that
revenue loss is recorded here. However, in the event the hotel elects to reverse
a no-show charge, either as a courtesy or an incorrect amount, then that
adjustment is a reversal of revenue and addressed in the Rooms Department.
 Administrative and General

Changes and Clarifications

Service Recovery. Includes all costs incurred to remediate service issues
experienced by a guest or patron. Costs may include services given as
compensation (e.g., free breakfast, spa service), loyalty points issued, fees
brands charge to handle complaints and certificates or credits for future stays
or services. If the hotel reduces revenue to the current stay it is recorded as a
reversal of revenue in the respective department's Allowances account.
 Information and
Telecommunications Systems
Schedule 6
 Information and Telecommunication Systems

Changes and Clarifications

In-room Entertainment Systems. In-room Entertainment Systems expense
previously in Rooms was moved to Information and Telecommunication Systems.
Cost of Complimentary In-Rooms/ Media Entertainment. Includes the cost of
providing media services (e.g., cable, music, games, satellite video) to guest
rooms. It does not include the cost associated with pay-for-a-fee media, which is
recorded to Other Operated Departments or netted against revenue in
Miscellaneous Income, whichever is appropriate.
 Information and Telecommunication Systems

System Expenses Captions Enhanced

System Expenses. System Expenses for each area includes systems not specified
elsewhere in the Information and Telecommunications Systems department that
are used by and primarily benefit the area noted. System Expenses includes
items such as software licenses fees and maintenance, software as a service
(SAAS applications) fees, hand-held devices, hosting storage fees (including
cloud storage), and technical support fees.
System Expenses excludes leased IT equipment which is recorded to Non-
Operating Income and Expenses – Schedule 11. System expenses specifically
exclude expenditures that can be capitalized (e.g., the development of systems).
 Information and Telecommunication Systems

System Expenses Captions Enhanced

Administrative and General. Includes any expenses of an accounting system and
security system (e.g., forecast and budgeting system and business intelligence (BI)
fees) for the property.
Hardware. Includes any expenses for non-capitalized equipment (e.g., keyboards,
computer mouse, credit card machines).
Human Resources. Includes any expenses of a human resources system (e.g., payroll,
HRIS, time clocks, labor management system, electronic timecards) for the property.
Information Security. Includes any expenses of the Information and
Telecommunications Systems department that are for the purpose to secure
information data (e.g., PCI compliance software, GDPR and affiliated costs).
 Information and Telecommunication Systems

System Expenses Captions Enhanced

Other. Includes any expenses of a guest related point-of-sale or reservation
system for other facilities on the property except transaction costs or
commissions related to a venue-specific third-party reservation or booking
system and operation of a mobile app (excludes text messaging charges for
guest feedback and e-check in which are included in the cost of cellphone).
Sales and Marketing. Includes any expenses of a sales, revenue
management, catering, and marketing system (e.g., software licensing fees,
SAAS applications, etc.) for the property. Sales related website expenses are
recorded to Website in Sales and Marketing – Schedule 7.
Property Operations and
Maintenance
Schedule 8
 Property Operations and Maintenance

Changes and Clarifications

Relocation of Waste Removal, to Energy, Waste, and Water under
the section of Waste.
Payroll Related Expenses
Schedule 14
 Payroll Related Expenses

Changes in Account Names

• Recognizing that the USALI is a multiple jurisdictional
publication, state and national payroll taxes have been
combined into Government-mandated Payroll Taxes.
• Parental Leave is added as a new expense item
• Contributory Savings Plan now includes Profit Sharing.
 No Changes
Part I
Operating Statements
 Operating Statements

No Changes Made:
Management Fees – Schedule 10
House Laundry – Schedule 12
Staff Dining – Schedule 13
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