Application Research Of The Activity-based Costing Management In The A Hotel

With the continuous development of economy, Chinese hospitality industry isgradually growing to be a huge-scale industry which is playing an important role inthe national economic development. However, the hospitality industry is faced withchallenges of consumers’ various requirements and the pressure of the competitivemarket with the rapid development. At the same time, hotel managers want to enrichthe ways of management. Therefore, the traditional cost calculation method can nolonger serve well. People’s demand for new methods is becoming more urgent. For itsreasonable cost calculation and more systematic and scientific management model,activity-based costing management is favored by managers. As a new managementmethod, activity-based costing management has been widely applied in foreigncountries, and the advantage of activity-based costing management is recognized bymore and more people. The academic and practical circles of our country haveaccelerated the application research and spread of the activity-based costing andactivity-based costing management.A Hotel is a three-star hotel, located in the southern bank of the Liao river,whichmainly provides rooms, catering, entertainment, leisure and other services forcustomers, and it’s annual sales is nearly25million Yuan. A Hotel attaches greatimportance to the financial system construction and owns relatively perfectaccounting system，comprehensive budget management, excellent evaluation systemand a strong spirit of saving. However, with the continuous improvement of the hotelmanagement level, A Hotel has found its own financial management problems. Thefirst one is the lack of costing management content and the relatively single method;secondly, the department cost accounting is not accurate that it threatens theassessment of department a lot; the third one is that the cost information for decisionsupport is not convincing. In order to solve the above problems, we combine thecharacteristics of A Hotel with the activity-based costing management theory, and wefind that it is feasible for application. On one hand, the activity-based costingmanagement can take advantage of its advanced management concept and optimized management method to help A Hotel improve its management level. On the otherhand, applying the activity-based costing management is promising. And the newhotel information management system, as well as the managers who attach greatimportance to the construction of financial management for the costing management，provides feasibility of the application of the activity-based costing managementmethod.In terms of the application research of activity-based costing management in AHotel, in essence， it is based on the understanding of the problems of costmanagement and the actual situation in A Hotel, combined with previous systematicand abundant relevant academic theories, designed a set of operation cost systemwhich is applicable to A Hotel. Furthermore, it studies how to use the system tooperate cost management practically and make A Hotel cost accounting morereasonable and product cost more accurate. It also makes cost information morehelpful for management decision process, budget and assessment etc. Then, it willhelp A Hotel improve management level and comprehensive benefits. The cost systemof A Hotel operation includes eight repositories, three operation centers and eighteenassignment libraries. These basic elements, the resources motivation, and theactivity-based motivation constitute A Hotel operation cost system together. Thissystem has the advantage of systematic content, clear logic and data availability，which can effectively support A Hotel for subsequent operating cost management.Activity-based costing management system of A Hotel contains cost and profitanalysis, cost control, budget prediction, performance evaluation, etc. It can help AHotel to realize the reasonable cost accounting, clear profit analysis, strict cost control,optimized business process, scientific budget prediction and convincing performanceevaluation through the implementation of the new management method.With the study of the application of activity-based cost management in A Hotel,we could achieve the following innovations through using a variety of integratedresearch methods. The first one is that this article distinguishes difference of theconcept between activity-based cost method and activity-based costing managementmore clearly. The second one is that this paper has a strong industry practicalsignificance, and the case is typical of the business scope and scale. The third one isthat this article confirms the activity and selects the work motivation creatively in theleisure area. The study of the activity-based costing management research in A Hotelnot only helps to enrich and improve the hotel operation cost management theory, butalso promotes the activity-based costing management method to apply in the hospitality industry. Furthermore, it improves the management level of the hotelindustry and the ability to cope with the competition，making hotel companies gain acompetitive advantage in the fierce competition of the market.