After years of work, the 12th edition of the Uniform System of Accounts for the Lodging Industry is expected be released this quarter.
The newest edition of USALI is the culmination of the work of the Global Finance Committee, a co-sponsored committee created by the American Hotel & Lodging Association and Hospitality Financial and Technology Professionals.
The 12th edition will be a significant milestone for the industry not just for its accounting standards but because it includes a broader set of operations-related financial standards, said Raymond Martz, committee co-chairman and co-president and chief financial officer at Pebblebrook Hotel Trust.
The committee has been working on the new edition for several years, Martz said. The pandemic extended the committee’s timeline on completing it. It was difficult handling every task over video calls, but once the committee members could meet again, the pace picked up, he added.
A falling out between the AHLA and HFTP interrupted work for about five months in 2022, but the committee resumed work after the two organizations resolved their dispute and committed to a 10-year partnership to produce USALI.
Everyone involved in the new edition is proud of it, Martz said. It was a lot of work, and it required a wide range of skill sets to pull it all together. It’s a product that balances the needs of hotel brands, owners and operators.
When considering any of the changes from the 11th edition, no matter how small, the committee made sure there was a cost benefit, he said. One party wanting to make a change or two could affect tens of thousands of properties around the world.
“If it's only a minor item to certain areas, we decided, ‘Well maybe the cost benefit isn't there to make the change,’” he said. “In other cases, as we evaluated as part of our calculus here, if we feel it is important to be additive, then that's where we pushed forward.”
At the moment, the Global Finance Committee is gathering feedback from multiple industry stakeholders in the U.S. and internationally, Martz said. The committee expects to publish it during the first quarter of this year. It’s targeting industry-wide adoption in calendar year 2026, but early adopters can move to the new standards sooner.
After the new edition is published, the committee will host a conference call open to the industry to provide high-level explanations of the major changes, Martz said.
In addition to the usual hard copy, the next USALI edition will be available in a digital format from HFTP, which owns publishing rights. The digital format will allow hoteliers to search through the new edition, making it easier and faster to find the information they need.
While it’s a new edition, there are fewer material changes from the 11th edition compared to the last transition, Martz said. There is a new section, however, called Energy, Waste and Water that focuses on setting benchmarks to track energy and water usage as well as waste production.
The EWW section should help hoteliers as they try to implement or increase their sustainability efforts, Martz said.
“You can’t improve something until you can measure it,” he said. “Once you can track and measure something, then you have a baseline from where you’re at and where you can go.”
The concept of sustainability is much better understood now compared to when the 11th edition came out, Martz said. The section on EWW will allow any owner and operator to calculate a hotel’s carbon emissions if they want to. In some states that require such reporting, this will be a helpful tool.
At the base level, it will let owners and operators know where their hotels are and where they can improve down the road, he said. It puts things on an apples-to-apples basis.
Another area the USALI committee spent a significant amount of time on was looking at brand image and company costs, Martz said. There’s an area in which management companies could have these related fees and costs in several different departments, making it difficult to see the total cost.
“What does it cost to have this manager operate the hotel, or this brand, and what are they bringing and so forth,” he said. “We now have a schedule that will summarize all those costs in a single schedule. That way it’s easier for an owner and operator to really benchmark.”
The extra transparency helps the relationship among brands, owners and operators because they’ll all know what the expenses are and can have a more directed conversation, he said.