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USALI vs US GAAP: A Guide for Hotels and Accountants

An in-depth cross-walk of USALI and US GAAP for hotel CFOs, controllers, and chartered accountants. Covers ASC 606 revenue recognition, ASC 280 segment reporting, lease accounting, undistributed operating expenses, owner’s costs, and USALI departmental schedules. Written with references to authoritative FASB and HFTP guidance.

HOTEL FINANCE

8/30/20257 min read

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white and brown book on brown woven surface

USALI vs US GAAP

Why Hotels need both

Accounting in hospitality is not just about compliance. Owners, lenders, brands, and investors also need to be able to review and compare Hotel's results. If you run a few Hotels, you need to be sure that both hotels are accounting for financial transactions in the same way.

While most U.S. businesses report under US GAAP (Generally Accepted Accounting Principles), hotels also follow another set of standards: the Uniform System of Accounts for the Lodging Industry (USALI).

As a member of HFTP (Hospitality Financial and Technology Professionals), the body that oversees the Global Finance Committee responsible for USALI — we at Antravia understand how these frameworks work together. Too often, the conversation reduces to GAAP alone, but hotels that rely only on GAAP miss the operational insights that USALI provides.
We have also worked with CPAs and Accountants worldwide, who had never even heard of USALI. Here we provide some more information, to help both Hotels and Accountants understand the differences.

What is USALI?

The Uniform System of Accounts for the Lodging Industry was first published in 1926 by the Hotel Association of New York City. Its purpose was simple but meant to transform the Hotel Accounting industry: create a common language of hotel financial reporting so properties could be compared fairly.

Today, USALI is maintained by HFTP’s Global Finance Committee, with regular revisions to reflect industry changes. The 12th edition will take effect on January 1, 2026, with updates for sustainability, loyalty program costs, and new departmental reporting. For now, the 11th edition remains the global reference point. At Antravia, we are already reviewing how Hotels need to prepare, so please look out for our next blog on this soon.

USALI is not a legal framework. It is a hotel-specific reporting model used by owners, management companies, brands, and lenders to compare properties and contracts on equal terms. It standardizes the definitions of revenue, operating departments, undistributed expenses, and key metrics like GOP (Gross Operating Profit) and EBITDA.

What is US GAAP?

US GAAP is the nationwide accounting standard issued by the Financial Accounting Standards Board (FASB). It governs how companies in every industry record revenue, recognize expenses, and present financial statements.

For hotels, GAAP ensures compliance in audited financial statements, tax reporting, SEC filings (for public chains), and consolidated results for owners and lenders.

What follows next is a quick factsheet of the key differences - See this section for more detail.

Key differences between USALI and GAAP

  • Purpose

    • GAAP: ensures external compliance, accuracy, and auditability.

    • USALI: ensures internal comparability across hotels and departments.

  • Scope

    • GAAP: covers the full entity — balance sheet, income statement, cash flow.

    • USALI: drills down into department-level reporting (rooms, food & beverage, spa, golf, conference).

  • Terminology

    • GAAP: standard line items like “Revenue” or “Operating Expenses.”

    • USALI: industry-specific terms such as Rooms Revenue, Undistributed Operating Expenses, Owner’s Expenses, Fixed Charges.

  • Flexibility

    • GAAP: must follow codified rules — revenue recognition, lease accounting, depreciation.

    • USALI: designed to align with GAAP but structured around operational decision-making.

In short: GAAP tells you what must be reported; USALI tells you how hotels should measure and compare performance.

Why do Hotels use both?

Hotels cannot ignore US GAAP as it is mostly set in law. But US GAAP alone may not necessarily give an owner visibility into whether the spa is profitable, or how one brand’s GOP compares to another. That is why almost every hotel management agreement or franchise contract specifies that reporting must be done under USALI. Indeed, if an Accountant ever applies for a job in hotel accounting, normally one of the pre-requisites is understanding of the USALI hotel system of Accounting.

  • Owners use USALI to benchmark performance across their portfolio.

  • Lenders and investors often require USALI in loan covenants to protect comparability.

  • Management companies rely on USALI to set performance metrics and incentive fees.

  • Auditors reconcile USALI departmental statements back to GAAP financials.

Without USALI, the lodging industry would lack the standardization needed for meaningful comparison. Without GAAP, it would lack compliance and credibility with regulators and tax authorities.

The Future: USALI 12th Edition (2026)

The upcoming edition introduces updates that reflect how the industry has evolved:

  • New line items for sustainability costs and ESG reporting.

  • Greater transparency for loyalty program accounting.

  • Clearer reporting on resort fees, service charges, and executive lounges.

Hotels that align early with these changes will be better positioned with investors and brands as ESG and guest transparency grow in importance.

A global note: Where IFRS fits in

Outside the U.S., many hotels report under IFRS (International Financial Reporting Standards). Like GAAP, IFRS governs entity-level reporting. But whether in Europe, Asia, or the Middle East, USALI remains the operational benchmark for hotels. That is why global hotel chains such as Accor, Marriott, and IHG use both IFRS and USALI to ensure consistency across markets.

Antravia Conclusion

The hotel industry requires two lenses:

  • GAAP for compliance, external reporting, and audit.

  • USALI for comparability, operational benchmarking, and industry-standard performance measures.

As an HFTP member, Antravia helps hotels bridge these frameworks. We translate GAAP’s compliance rules into USALI’s operational insights, ensuring owners, operators, and lenders all speak the same financial language.

clear blue body of water
clear blue body of water

Technical Appendix — USALI vs US GAAP: A Practitioner’s Cross-Walk for Accountants

1) Purpose and reporting lens

US GAAP (what it says): A comprehensive, rules-based framework for recognition, measurement, presentation and disclosure for U.S. entities (FASB ASC). External/audited reporting; tax and regulatory credibility.


USALI (what it says): An industry reporting model that standardizes hotel operating statements for comparability and performance management across owners, operators and lenders. It is GAAP-guided but not a substitute for GAAP financial statements.
USALI Part I — Operating Statements; department schedules and standardized margin definitions (GOP, EBITDA).

2) Statement architecture and level of detail

US GAAP: Presents the entity-wide income statement, balance sheet and cash flows. Departmental breakouts are not prescribed (segment reporting applies only to public entities under ASC 280).


USALI: Requires department-level operating statements (e.g., Rooms, Food & Beverage, Spa), followed by Undistributed Operating Expenses and standardized non-operating sections.
Part I with Rooms — Schedule 1; F&B — Schedule 2; Undistributed — Schedules 6–9; Management & Franchise Fees — Schedule 10; Non-Operating Income & Expenses — Schedule 11.

3) Revenue recognition vs revenue presentation

US GAAP (ASC 606): Recognize revenue when control of promised services transfers. Principal vs agent analysis in ASC 606-10-55 determines whether gross or net presentation is appropriate; loyalty points and breakage follow the guidance on unexercised rights.


USALI: Does not set recognition rules; it standardizes where revenue is presented in hotel statements (e.g., Rooms, F&B, Other Operated Depts, Misc. Income) to enable like-for-like GOP comparisons. USALI 12th expands clarity for resort fees/service charges and loyalty-related items in standardized schedules.

4) Management and franchise fees

US GAAP: Fees are recognized per ASC 606 for managers; for owners they are expenses recognized per contract terms (no mandated income-statement location beyond general presentation principles).


USALI: Isolates these as a distinct line cluster for comparability:
Management & Franchise Fees — Schedule 10 (Part I), separate from Undistributed Operating Expenses.

5) Undistributed Operating Expenses (A&G, IT, POM, Utilities)

US GAAP: Classification is principles-based; entities choose presentation policies consistently; no industry-specific “undistributed” concept.


USALI: Mandates a four-bucket undistributed structure for comparability:
Information & Telecommunications Systems — Schedule 6; Sales & Marketing — Schedule 7; Property Operations & Maintenance — Schedule 8; Utilities — Schedule 9.

6) Non-operating items, fixed charges, and owner expenses

US GAAP: Interest, income taxes and many owner-specific items are presented below operating income or in other non-operating sections per general presentation guidance; depreciation/amortization follow ASC 360 principles.


USALI: The 11th edition replaced “Fixed Charges” with Non-Operating Income & Expenses — Schedule 11 and explicitly introduced Owner’s Expenses (asset management fees, partnership costs) within the non-operating framework to align EBITDA comparability across contracts.

7) Replacement reserve (FF&E) vs capex

US GAAP: Transfers to a FF&E reserve are not an expense; actual capital expenditures appear in the cash-flow statement (ASC 230), and depreciation in the income statement (ASC 360).


USALI: Tracks EBITDA and also reports EBITDA less Replacement Reserve to reflect covenant and owner reporting conventions; reserve disclosures appear alongside Schedule 11 non-operating sections and owner schedules.

8) Loyalty programs, resort fees and service charges

US GAAP (ASC 606): Loyalty points are separate performance obligations or incorporate breakage when appropriate; resort fees and mandatory service charges require principal vs agent analysis to determine gross vs net and whether amounts are revenue or pass-through.


USALI: The 12th clarifies loyalty program cost placement and adds transparency for resort fees/service charges in the operating statement structure to preserve comparability across brands and management agreements.

9) Segment disclosures vs departmental reporting

US GAAP: Public entities disclose segments under ASC 280 (CODM view, significant expenses, reconciliations per ASU 2023-07). Private entities generally do not present ASC 280 segment data.


USALI: Departmental reporting is always required for hotel comparability irrespective of public/private status; it is integral to Part I of USALI.

10) Definitions of operating metrics

US GAAP: Does not define hotel-specific operating KPIs (ADR, RevPAR, GOPPAR).


USALI: Defines and standardizes hotel KPIs and margin constructs (e.g., GOP and EBITDA at consistent levels in the statement), enabling benchmarking across owners/brands/markets.

11) Leases and rent

US GAAP (ASC 842): Recognition of ROU assets and lease liabilities; expense recognition depends on lease classification; presentation follows ASC 842/ASC 205.


USALI: Classifies rent within Non-Operating Income & Expenses — Schedule 11, preserving operating comparability (GOP) independent of ownership/lease structure.

12) Governance and update cadence

US GAAP: Continuous FASB agenda with ASUs (e.g., ASU 2023-07 for segments).


USALI: Stewarded by HFTP’s Global Finance Committee (with AHLA), explicitly “based on U.S. GAAP with consideration of IFRS”; 12th Revised Edition effective Jan 1, 2026.

Practitioner Takeaway

  • File and audit under US GAAP.

  • Operate, compare, and covenant under USALI.
    Bridging the two is essential for credible management agreements, lender reporting, and cross-brand benchmarking. Move differences to policy footnotes, maintain a reconciliation from USALI departmental statements to GAAP financials, and align covenant definitions (e.g., “EBITDA less replacement reserve”) to USALI schedules referenced in your agreements.

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Trigonium species

References

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