The 12th edition of the Uniform System of Accounts for the Lodging Industry, which sets standards for hospitality accounting, is set to come out later this year with expanded sections, new features and a more comprehensive approach to the how finances and operations can overlap.
There had been a roughly five-month-long interruption in work on updating USALI after a falling out between industry organizations Hospitality Financial and Technology Professionals and the American Hotel & Lodging Association due to competing events taking place at the same time.
With the dispute resolved, HFTP and AHLA have agreed to a 10-year partnership to produce USALI.
HFTP CEO Frank Wolfe said the situation was complicated situation, but the new agreement with AHLA will work better than the previous one, and most of the improvements are internal rather than public-facing. Each organization has a different focus, and their ability to complement each other is what makes their partnership on drafting the next edition of USALI work so well, he said.
In a news release announcing the agreement, AHLA Chief Operating Officer and Executive Vice President Kevin Carey said USALI reflects the input and hard work of the hospitality industry’s top financial minds.
“This agreement, which preserves and enhances AHLA’s role in creating USALI content, will ensure USALI remains the industry standard for hospitality accounting for years to come,” he said. “Along with HFTP, we believe it is in the industry’s best interest for our two associations to work cooperatively on USALI, and we look forward to doing just that as we work to complete the 12th edition — and future editions over time.”
AHLA did not respond to a request for additional comment.
The 12th edition of the guidelines will be available in a digital as well as physical format, Wolfe said. A database will allow users to compare the 10th, 11th and 12th editions to see how entries have changed over time. There will also be a searchable dictionary of 7,500 to 8,000 terms.
HFTP is also working to translate the 12th edition into other languages, and working with some hospitality associations in European countries to help create standards of accounting.
Evolving Metrics
It’s important to have unified standards for reporting financial and operational metrics, said Raymond Martz, executive vice president and chief financial officer at Pebblebrook Hotel Trust. Martz is co-chairman of the Global Finance Committee, a jointly created group that has been working on updating and expanding USALI, with Gina Tallarico, senior vice president and global head of acquisition integration at Hyatt Hotels Corp.
Martz said the new edition reflects changes in hospitality from technology — with digital systems becoming a larger part of operations than ever before — to sustainability.
Decades ago, USALI was primarily used by accountants as guidelines for how to report revenue and expenses. The guidelines now also delve more into the operations side of hospitality, which has become more complicated over the years.
The lines have blurred between the financial and operational sides, Martz said. Operators will want to know what makes sense from the perspectives of revenue, expenses and return on investment.
One example of that is the creation of the energy, water and waste section in the new edition, he said. It creates standards to track the usage of energy and water and measure the amount of waste produced at a hotel, but also provides better understanding of how a property runs.
“Those sorts of things can help you identify opportunities better,” Martz said. “We surely have that focus on the financial standards, but more and more, as the world is getting more complicated, we do need to address some of these operating standards and metrics.”
Back to Work
The General Finance Committee has members from hotel brands, ownership and management companies, Martz said. It’s a 50-50 mix of brand/operations and ownership, with some members that are part of publicly traded companies while others are from privately held businesses. The committee also seeks input from other industry associations and smaller brands, managers and owners.
It’s a good representation of the industry, bringing in different interests, because it requires compromise to put the next edition together, he said.
“I may have issues as an owner that we are more focused on, but I’ve tried to put myself in the shoes of how does a brand look at it, how does a manager, and try to help find things that are fair and balanced that are not going to benefit one group at the expense of another,” he said.
The committee will meet for the first time in person since the start of the pandemic this month, Martz said.
The goal is to have the 12th edition published by the second half of the year, giving hoteliers two years to adopt any changes by the 2025 budget year, Martz said.