These changes aim to enhance the accuracy and efficiency of financial reporting, further supporting effective financial management and accounting in hotels.
The updates in the USALI 12th Edition have been developed to align with changes in the hotel industry and improvements in hotel accounting regulations. This article will delve into the significant changes in the Rooms Department, including the segmentation of room revenue, management of loyalty program expenses, operation of executive lounges, and reporting of in-room entertainment expenses. These changes aim to enhance the accuracy and efficiency of financial reporting, further supporting effective financial management and accounting in hotels.
Rooms Revenue Segmentation
To provide more detailed insights into Rooms revenue, several specific clarifications have been introduced:
- Qualified Segment Loyalty redemptions and offers exclusive to loyalty program members beyond basic rates are now explicitly included.
2. Discount Segment It is now clarified that OTA discounts, promotions, and opaque channel rates available to the general public should be included in this segment.
3. Negotiated Segment This segment now specifically includes consortia rates, government or government contractor rates, and room charges for companies that negotiate per diem rates.
Loyalty Program Costs
Clarifications have been added regarding loyalty costs, specifying where such costs should be classified. Benefits provided exclusively to loyalty program members should now be recorded in a new account under Rooms – Schedule 1. This includes amenities like concierge lounge access, complimentary water, and Wi-Fi access. If guests choose points over other on-property benefits, these costs are recorded in this new Rooms line item. Service recovery costs remain in the Administrative and General department, while costs for loyalty program stays and promotions are still under the Sales and Marketing department
Executive Lounge
Enhanced transparency is provided for the Executive Lounge. Revenues from the sale of access to these private spaces are recorded under Other Rooms Revenue, based on the premium charged for access. Ancillary revenues from alcohol sales or meeting room rentals associated with the lounge should be recorded in their respective departments.
A new Schedule 1-1 has been created to itemize operating expenses for the Executive Lounge, with costs allocated proportionally between paying customers and loyalty program member benefits. This schedule also includes new staffing titles for the Executive Lounge.
In-Room Entertainment
Costs for in-room entertainment will now be reported under the Information and Telecommunications Department, rather than Rooms.
Optional Reporting
Updates have been made to clarify segmentation and channels for room revenue reporting, as detailed in Part V – Metrics, Operating Ratios, and Optional Schedules. This includes subsegments for transient revenue reporting, categorized into retail, discount, qualified, negotiated, and wholesale. An optional schedule details room revenue by booking channels, such as direct property booking, voice, brand website or app, mirrored brand direct, GDS, OTA, or other channels.
The 12th Edition of USALI introduces significant improvements to hotel accounting practices by providing clear guidelines and more detailed classifications in managing room revenue. It also improves the categorization of loyalty program expenses and offers more detailed reporting, making hotel financial reporting more accurate and aligned with changes and situations in the industry. Updates related to private lounge operations and the allocation of expenses for in-room entertainment systems help streamline operations.
These improvements aim to support more efficient financial management and accounting in hotels, aiding strategic decision-making in hotel management processes. To gain a better understanding of these changes and their practical applications, we recommend following the in-depth details soon to be available at www.carmensoftware.com.
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