CRITICAL UNDERSTANDING OF PERCEPTION OF HOTEL MANAGEMENT TOWARDS ABC SYSTEM

Authors

  • Suresh Prajapati Rai School of Management Studies, Rai University Ahmedabad
  • Prof. (Dr.) Paresh Shah Principal and Professor, Rai School of Management Studies, Rai University, Ahmedabad

Keywords:

Hotel Industry, Activity Based Costing, Costing, Pricing

Abstract

The focus is shifting from standardisation to customization in this age of intense price and quality competition. Traditional costing methods have become obsolete due to the incorrect allocation of various expenditures, especially overheads. When it comes to determining true and fair prices, the activity-based costing system is a fresh innovation. Given that activities and cost drivers are the primary emphasis of activity based costing, it makes sense to begin by defining those activities. The purpose of activity-based costing is to provide a more precise accounting of hotel service costs. Effectiveness and profit margins may both improve as a result of charging prices that are closer to what they really cost to produce. Activity based costing is essential in the hospitality industry because it reveals the true profitability of your customers through hotel industry services, pinpoints opportunities to reduce costs and/or increase efficiency in all hospitality industry services, and provides actionable information to negotiate price reductions and cost reductions for various activities. It has been argued that using activity-based pricing to determine hotel service prices is the most accurate way to do it. To conduct this analysis, the researcher focused on 75 hotel managers working in Gujarat and asked them about their thoughts on ABC.

References

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II. Basuki, B., & Riediansyaf, M. D. (2014). The Application of Time-Driven Activity- Based Costing In the Hospitality Industry: An Exploratory Case Study. Journal of Applied Management Accounting Research, 12(1), 27.

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Additional Files

Published

15-07-2022