Analyzing customer profitability in hotels using activity based costing
This paper investigates the use of customer profitability analysis (CPA) in four and five star hotels located in Algarve (Portugal). Traditional accounting systems have been criticized for focusing on product, service or department profitability, and not on customer profitability, thus failing t...
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| Format: | Article |
| Language: | English |
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University of Algarve, ESGHT/CINTURS
2018-07-01
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| Series: | Tourism & Management Studies |
| Subjects: | |
| Online Access: | https://tmstudies.net/index.php/ectms/article/view/1089/pdf_109 |
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| author | Ana Rita Faria Leonor Ferreira Duarte Trigueiros |
| author_facet | Ana Rita Faria Leonor Ferreira Duarte Trigueiros |
| author_sort | Ana Rita Faria |
| collection | DOAJ |
| description | This paper investigates the use of customer profitability analysis (CPA)
in four and five star hotels located in Algarve (Portugal). Traditional
accounting systems have been criticized for focusing on product,
service or department profitability, and not on customer profitability,
thus failing to provide effective information to marketing-related
decisions. Results are reported by operating departments, whilst
marketing activities focus on customer market segments. Recognizing
the growing emphasis on customer value creation, and to overcome the
mismatch between the provision and use of information in hotels, CPA
techniques have been suggested. Notwithstanding their benefits,
namely a strategic focus, hotels still apply traditional techniques. A
structured questionnaire collected through personal interviews showed
that CPA is far from widespread in hotel management; instead, hotels
accumulate costs in profit centers and in cost centers. None of the
surveyed hotels had adopted activity based costing, despite this
technique being viewed as the most appropriate to calculate individual
customer profitability. |
| format | Article |
| id | doaj-art-54d8cc71a3a949e49e5da926db0a2ef1 |
| institution | Kabale University |
| issn | 2182-8466 |
| language | English |
| publishDate | 2018-07-01 |
| publisher | University of Algarve, ESGHT/CINTURS |
| record_format | Article |
| series | Tourism & Management Studies |
| spelling | doaj-art-54d8cc71a3a949e49e5da926db0a2ef12025-02-02T17:47:55ZengUniversity of Algarve, ESGHT/CINTURSTourism & Management Studies2182-84662018-07-01143657410.18089/tms.2018.14306Analyzing customer profitability in hotels using activity based costingAna Rita Faria0Leonor Ferreira 1Duarte Trigueiros2University of Algarve, ESGHT, Campus da Penha, 8005-139 Faro, PortugalNova School of Business and Economics, Campus de Carcavelos, Rua da Holanda, 1, 2775-405 Carcavelos, PortugalISTAR-IUL, University Institute of Lisbon, Av. Forças Armadas, 1694-026 Lisbon, PortugalThis paper investigates the use of customer profitability analysis (CPA) in four and five star hotels located in Algarve (Portugal). Traditional accounting systems have been criticized for focusing on product, service or department profitability, and not on customer profitability, thus failing to provide effective information to marketing-related decisions. Results are reported by operating departments, whilst marketing activities focus on customer market segments. Recognizing the growing emphasis on customer value creation, and to overcome the mismatch between the provision and use of information in hotels, CPA techniques have been suggested. Notwithstanding their benefits, namely a strategic focus, hotels still apply traditional techniques. A structured questionnaire collected through personal interviews showed that CPA is far from widespread in hotel management; instead, hotels accumulate costs in profit centers and in cost centers. None of the surveyed hotels had adopted activity based costing, despite this technique being viewed as the most appropriate to calculate individual customer profitability.https://tmstudies.net/index.php/ectms/article/view/1089/pdf_109customer profitability analysismarket segmentation profit analysisactivity based costinghotel sectoralgarve |
| spellingShingle | Ana Rita Faria Leonor Ferreira Duarte Trigueiros Analyzing customer profitability in hotels using activity based costing Tourism & Management Studies customer profitability analysis market segmentation profit analysis activity based costing hotel sector algarve |
| title | Analyzing customer profitability in hotels using activity based costing |
| title_full | Analyzing customer profitability in hotels using activity based costing |
| title_fullStr | Analyzing customer profitability in hotels using activity based costing |
| title_full_unstemmed | Analyzing customer profitability in hotels using activity based costing |
| title_short | Analyzing customer profitability in hotels using activity based costing |
| title_sort | analyzing customer profitability in hotels using activity based costing |
| topic | customer profitability analysis market segmentation profit analysis activity based costing hotel sector algarve |
| url | https://tmstudies.net/index.php/ectms/article/view/1089/pdf_109 |
| work_keys_str_mv | AT anaritafaria analyzingcustomerprofitabilityinhotelsusingactivitybasedcosting AT leonorferreira analyzingcustomerprofitabilityinhotelsusingactivitybasedcosting AT duartetrigueiros analyzingcustomerprofitabilityinhotelsusingactivitybasedcosting |