The Uniform System of Accounts for the Lodging Industry (USALI) is the hospitality industry’s standard for financial reporting, offering clear guidelines to ensure consistency and transparency. The 12th edition, set to take effect on January 1, 2026, introduces significant changes to address modern challenges and improve operational insights. To ensure a seamless transition, many properties are beginning to adopt these practices in 2025.
This detailed guide explores the six key updates in the 12th edition and how Inn-Flow can streamline the adoption process, helping your team stay ahead of the curve.
Six Critical Updates in the USALI 12th Edition
1. Guest Loyalty Program Costs in the USALI 12th Edition
Loyalty programs have become a powerful tool for driving repeat business, but they come with rising costs. The 12th edition introduces new expense categories to separate loyalty-related expenses from general guest costs. These changes enable hotels to measure program ROI and negotiate effectively with loyalty program providers.
What You Need to Do:
- Create additional accounts to track loyalty program expenses.
- Ensure your system differentiates costs for loyalty program guests versus all other guests.
Why It Matters: Accurate tracking of loyalty program costs helps hotel owners and operators assess the true value of these programs and make data-driven decisions to optimize their benefits.
2. Executive Lounge Reporting Updates in the USALI 12th Edition
Executive lounges can be both a revenue driver and a cost center. The new Schedule 1-1 offers detailed guidance on capturing executive lounge-related costs and revenues within the Rooms Department.
What You Need to Do:
- Separate labor, food, and other expenses associated with the executive lounge in your reporting.
- Allocate revenues from the executive lounge to their corresponding categories.
Why It Matters: This change provides a clearer picture of the financial impact of executive lounges, empowering hotels to evaluate their contribution to profitability.
3. FTE Labor Tracking: A Key Focus of the USALI 12th Edition
Labor costs are the largest operational expense for most hotels, yet previous editions of USALI lacked detailed labor tracking requirements. The new Schedule 15 introduces Full-Time Equivalent (FTE) reporting to measure labor efficiency.
What You Need to Do:
- Ensure payroll systems record employee hours and department assignments accurately.
- Use FTE metrics such as FTEs per occupied room or FTEs per cover to analyze labor efficiency.
Why It Matters: FTE reporting offers insights into labor productivity, allowing hotels to identify areas for optimization and control costs more effectively.
4. Consolidated Brand and Operator Costs in the USALI 12th Edition
The new Schedule 16 consolidates expenses charged by brands and management companies into a single report, providing greater transparency into these costs.
What You Need to Do:
- Collaborate with your brand or management company to ensure accurate expense reporting.
- Categorize all operator-related charges under the new guidelines.
Why It Matters: This update allows hotel owners to gain a holistic view of the costs associated with brand and operator services, facilitating better financial planning.
5. All-Inclusive Hotel Reporting in the USALI 12th Edition
All-inclusive (AI) properties have unique financial structures that require specialized reporting. The 12th edition introduces Part II, a dedicated section for tracking AI revenues and expenses.
What You Need to Do:
- Configure accounting systems to separate package revenue from other income streams like upsells, weddings, or spa services.
- Track non-package revenues to support benchmarking.
Why It Matters: This change ensures that AI properties can report their financial performance accurately and compare it with industry benchmarks.
6. Energy, Water, and Waste Tracking in the USALI 12th Edition
Sustainability is increasingly important for both guests and regulatory bodies. The former Utility Department has been renamed Energy, Water, and Waste (Schedule 9) and now includes expanded categories like renewable energy and composted waste.
What You Need to Do:
- Work with utility and waste management providers to gather detailed consumption and expense data.
- Implement tracking systems to meet reporting requirements for environmental impacts.
Why It Matters: Enhanced reporting supports sustainability initiatives and appeals to environmentally conscious travelers, boosting your property’s reputation.
How Inn-Flow Simplifies USALI Compliance
At Inn-Flow, we understand the complexities of transitioning to new industry standards. Our platform is specifically designed to align with USALI requirements and simplify financial reporting for hotels. Here’s how we can help:
1. Automated Financial Reporting
- Generate reports that align with the new USALI schedules, including loyalty program costs, executive lounge expenses, and brand/operator cost consolidation.
2. Labor Management Tools
- Effortlessly track employee hours, departmental assignments, and FTE metrics to meet labor reporting requirements.
3. Customizable Chart of Accounts
- Tailor your accounts to differentiate package revenue, upsells, and other unique income streams for all-inclusive properties.
4. Sustainability Tracking
- Capture data on energy, water, and waste consumption to comply with expanded environmental reporting standards.
5. Expert Guidance and Support
- Our team of hospitality accounting experts provides training and personalized support to ensure a seamless transition.
Why Start Preparing Now?
Proactive preparation for the USALI 12th edition ensures your hotel avoids disruptions, maintains accurate financial benchmarks, and stays ahead in a competitive industry. With Inn-Flow’s advanced tools and support, you can navigate these changes confidently while optimizing financial performance.
Learn more about the 12th edition and how to prepare by visiting usali.hftp.org.
Take the First Step Toward Compliance
The upcoming USALI changes may seem daunting, but with Inn-Flow’s powerful platform and expert support, you can ensure your property is ready for 2026 and beyond. From automated reporting to sustainability tracking, we provide everything you need to streamline compliance and maximize profitability.
Contact Inn-Flow today for a personalized consultation. Together, we’ll ensure your hotel’s financial success under the new standards.