The Impact of Activity-Based Costing Implementation on Pricing Decision in Hospitality Industry

ALISHA NABILA , Ted Walten

2017 | Skripsi | S1 AKUNTANSI

In recent years, the development of hospitality industry has increased incredibly due to the development of technology, especially internet, which allows price transparency and makes customer easier in choosing the best hotel for them. However, the competitiveness in the hospitality market become intense. Thus, firms in hospitality industry have to make realistic and competitive pricing decision to survive in the market. Thus, the question is what is the proper costing system to improve the pricing decision in hospitality industry. Due to the advantages over traditional costing system, activity-based costing is chosen. This thesis aims to examine whether the application of ABC in hospitality industry will improve the pricing decision. In achieving the aim, a review of prior literature on activity-based costing from management, accounting, and hospitality industry was conducted. The results indicate that many hotels found that the application of ABC leads to a more accurate and reliable cost information. They also found that the implementation of ABC allowed them to conduct customer profitability analysis and get better and proper results about the profitability of customers. However, the managers also found some challenges of ABC such as expensive, time-consuming, and complex. Despite the challenges, the managers claimed that the more accurate and proper cost information and CPA result produced by ABC to lead to improved pricing decision.

In recent years, the development of hospitality industry has increased incredibly due to the development of technology, especially internet, which allows price transparency and makes customer easier in choosing the best hotel for them. However, the competitiveness in the hospitality market become intense. Thus, firms in hospitality industry have to make realistic and competitive pricing decision to survive in the market. Thus, the question is what is the proper costing system to improve the pricing decision in hospitality industry. Due to the advantages over traditional costing system, activity-based costing is chosen. This thesis aims to examine whether the application of ABC in hospitality industry will improve the pricing decision. In achieving the aim, a review of prior literature on activity-based costing from management, accounting, and hospitality industry was conducted. The results indicate that many hotels found that the application of ABC leads to a more accurate and reliable cost information. They also found that the implementation of ABC allowed them to conduct customer profitability analysis and get better and proper results about the profitability of customers. However, the managers also found some challenges of ABC such as expensive, time-consuming, and complex. Despite the challenges, the managers claimed that the more accurate and proper cost information and CPA result produced by ABC to lead to improved pricing decision.

Kata Kunci : activity-based costing; hospitality industry; cost information; customer profitability analysis; pricing decision