Breaking Down the 2026 USALI Changes: What Hotel Finance Leaders Must Prepare for Now? 

Introduction 

For nearly a century, USALI has been the hidden language of hotel finance—a standardised system quietly governing how owners and operators measure success. But the 12th Edition, launching in 2026, isn’t just another update.  

It’s a seismic shift that will rip the curtain back on loyalty program costs, expose hidden operator fees, and force the industry to confront a question it’s avoided for decades: What are we actually paying for? 

Consider this: A hotel owner today might see a $20 line item for a ‘system support fee’ buried in their P&L. By 2026, thanks to USALI’s new Brand & Operator Cost Schedule (Schedule 16), they’ll discover it’s actually a charge every time an employee resets a password—adding up to thousands per year. That’s the power of this revision: transparency that could rewrite owner-operator relationships. 

The changes go deeper. For the first time: 

• Loyalty programs—long considered a ‘necessary cost’—will have their ROI laid bare (will yours survive scrutiny?) 
• Executive lounges must prove their worth with dedicated cost tracking (many won’t) 
• FTE labor metrics will reveal staffing inefficiencies in black and white 
• Even all-inclusive resorts, the industry’s fastest-growing segment, finally get their own rulebook 

Why act now? Because the smartest hotels aren’t waiting until 2026. They’re using 2025 to track data under the new standards—ensuring they’re not blindsided when compliance kicks in. The message is clear: In this new era of financial accountability, the early adopters will control the narrative—and the profits. 

6 USALI Changes That You Should Be Aware 

1. Loyalty Program Cost Transparency

What’s New: The new edition introduces discrete expense categories specifically for loyalty programs, breaking down costs into distinct categories such as point redemptions, marketing, and IT. 

Why It Matters: Previously, the costs associated with loyalty programs were aggregated, making it challenging for hotel owners to discern specific expense drivers. This change brings clarity and transparency, revealing the true cost of maintaining loyalty programs. 

Implications: 

• Strategic Reevaluation: Hotel owners can now evaluate the cost-effectiveness of loyalty programs with greater precision, potentially leading to renegotiations of terms with franchise operators or decisions to exit programs that do not meet financial criteria. 
• Accountability for Operators: Hotel operators are now required to justify the expenses of loyalty programs by demonstrating a clear return on investment to the hotel owners, ensuring that the programs are beneficial to the bottom line. 

Action Steps: 

• Financial Auditing: Conduct detailed audits of all expenses related to loyalty programs in 2025 to establish clear financial baselines and identify major cost factors. 
• Accounting Adjustments: Update the hotel’s chart of accounts to include these new categories under loyalty program expenses. This adjustment will facilitate more accurate budgeting and forecasting for future periods. 

2. Executive Lounge Cost & Revenue Tracking

What’s New: A new dedicated schedule for tracking all costs and revenues associated with executive lounges, including labor, food and beverage (F&B), and direct revenues from lounge services. 

Why It Matters: Executive lounges, while providing value to premium guests, often operate at a loss. The ability to track these costs and revenues separately provides critical data for evaluating their financial viability. 

Implications: 

• Operational Decisions: Management can make informed decisions about the future of lounges, such as downsizing or potentially closing unprofitable lounges. 
• Cost Control: There will be enhanced scrutiny over how resources are allocated within lounges, particularly regarding labor and F&B expenses, potentially leading to more efficient operations. 

Action Steps: 

• Expense Segregation: Isolate and record all payroll and operational expenses for lounges separately in the 2025 financial year. 
• Competitive Benchmarking: Utilise the new data provided by USALI to benchmark lounge operations against industry standards and competitors to identify areas for improvement. 

Check out our latest blog: “9 Costly Financial Mistakes Hospitality Businesses Keep Repeating” – don’t miss these vital insights! 

3. Full-Time Equivalent (FTE) Employee Reporting

What’s New: Hotels are now required to track and report Full-Time Equivalent (FTE) employees by department, correlating these figures with operational metrics such as rooms occupied. 

Why It Matters: Labor management is crucial in hospitality, and standardising FTE reporting enables better comparative analysis and operational efficiency. 

Implications: 

• Enhanced Staffing Strategies: With standardised metrics, hotels can optimise staffing based on actual needs driven by occupancy and service demands, potentially reducing labor costs. 
• System Integration: Existing payroll systems may need to be upgraded or replaced to handle the new FTE tracking requirements effectively. 

Action Steps: 

• System Review and Upgrade: Ensure that payroll systems are equipped to accurately track and report FTE data by department. 
• Managerial Training: Provide training for department managers on interpreting FTE data and making informed staffing decisions based on efficiency benchmarks. 

4. Brand & Operator Cost Schedule

What’s New: Consolidation of all fees related to brand and operator services into a single, comprehensive report, covering areas like training, IT support, and recruiting. 

Why It Matters: This consolidation exposes previously obscured fees, such as minor but frequent IT charges, and provides a clearer picture of the total cost of brand and operator services. 

Implications: 

• Fee Reduction Pressure: Operators might be prompted to lower fees or adjust fee structures to maintain good relations with property owners. 
• Increased Negotiating Power: Owners gain significant leverage in management contract negotiations, empowered by detailed insights into what they are being charged for. 

Action Steps: 

• Fee Transparency Request: Ask for a detailed, itemised list of all fees from operators as soon as possible to understand the full scope of charges under the new schedule. 
• Implementation of Tracking Systems: Develop and implement a robust internal tracking system to monitor these fees continuously, ensuring alignment with financial planning and budgeting. 

5. Energy, Water & Waste (EWW) Reporting

What’s New: The utility department’s renaming and the expansion to include detailed data points on energy (including renewables), water, and waste management. 

Why It Matters: This change aligns with global shifts towards sustainability, providing critical data for compliance with environmental standards, and enhancing eligibility for green financing. 

Implications: 

• Financial Incentives: Detailed reporting enables hotels to qualify for tax incentives and other financial benefits in markets that prioritise environmental sustainability. 
• Operational Efficiency: With granular data, hotels can more effectively implement and measure waste reduction strategies and other sustainability initiatives. 

Action Steps: 

• Utility Partnerships: Form strategic partnerships with utility providers to ensure comprehensive data capture of all consumption and waste management activities in 2025. 
• Sustainability Alignment: Collaborate closely with corporate sustainability teams to integrate this detailed utility data into broader environmental objectives and reporting. 

Discover how to plug your profit drains with our blog, “Stop Losing Money: How To Fix Hidden Revenue Leaks in Hospitality.” Read now! 

6. All-Inclusive (AI) Hotel Guidelines

What’s New: Introduction of the first standardised reporting framework for All-Inclusive resorts, categorising revenues into package-based and a la carte services. 

Why It Matters: The All-Inclusive segment is rapidly growing but previously lacked a standardised approach for financial reporting. This framework facilitates better financial management and clearer performance assessments. 

Implications: 

• Improved Financial Comparisons: Enables more accurate benchmarking and performance assessment across the All-Inclusive sector. 
• Strategic Financial Planning: Provides AI operators with a clearer understanding of revenue streams, supporting more strategic financial planning and management. 

Action Steps: 

• Revenue Segmentation: Implement systems to meticulously track and report different revenue streams within AI properties, such as upsells, special events, and additional services. 
• Model Assessment: For traditional hotels considering transitioning to or incorporating an AI model, conduct thorough feasibility studies to assess potential impacts and benefits. 

What’s the Bottom Line? 

The USALI 12th Edition isn’t just another accounting update—it’s a seismic shift in who holds the power in hospitality finance. For years, owners have operated in the dark, forced to accept vague line items and “trust us” explanations from operators. Now, with surgical precision, these new standards will expose what’s really been happening behind the P&L curtain.  

Loyalty programs will have to prove their worth. Executive lounges can no longer hide their losses. Every dollar spent on brand-mandated initiatives will face scrutiny. This isn’t merely compliance; it’s financial daylight. 

What makes this moment extraordinary isn’t just the transparency—it’s the opportunity. The hotels that move fastest will turn these changes into weapons. Imagine negotiating management contracts armed with irrefutable cost data.  

Picture walking into lender meetings with standardised sustainability metrics that unlock green financing. Envision optimising labor models with FTE benchmarks your competitors don’t even track yet. The early adopters won’t just be ready for 2026; they’ll enter it leaner, smarter, and more profitable. 

But this revolution has an expiration date. The window to prepare—to audit contracts, upgrade systems, and train teams—is already closing. When the first 2026 reports land, there will be two kinds of hotels: those using this data to drive decisions, and those scrambling to explain why their numbers look worse than everyone else’s.  

The question isn’t whether you’ll adapt to the USALI 12th Edition. It’s whether you’ll do it with enough time, enough insight, and enough boldness to come out ahead. Because in this new era of financial transparency, ignorance won’t just be bliss—it’ll be expensive. 

If you want to know more about the USALI changes, click here.  

Originally published Apr 02, 2025 04:04:34, updated Apr 02 2025

Topics: Finance and Accounting Transformation, Hospitality Accounting