Analysis of Activity-Based Costing and its application in hotel management

There is a "supply exceeds demand" situation appearing in the hotel industry these years, which incandesces the competition of hotel. In order to play active roles in competition, hotel management layer on one side make great efforts to reduce the operation costs and increase operation efficiency; on the other side, they exploit and innovate, for instance designing new service projects, verifying the categories of products and increasing the sells so as to satisfy customer's all kinds of requirement. However, no matter what kind of competitive method, the managers of hotel are required to make sure both product and service's value towards customers and enterprise that is produced by hotel and the resources that are consumed for creating this value. Traditional costs accounting system is incapable to solve such kind of problem well and so this essay introduces an advanced management method, which is Activity-Based Costing, and discusses its application in hotel management.