Cost Management Practices in Hotels: An Empirical Study of Activity-Based Costing in Gujarat

The hospitality industry operates in a highly competitive environment where effective cost management is essential for maintaining profitability and operational efficiency. The present study titled “Cost Management Practices in Hotels: An Empirical Study of Activity-Based Costing in Gujarat” aims to examine the perception of hotel managers and accounting personnel towards the adoption and usefulness of Activity-Based Costing as a cost management practice. The study also focuses on understanding how Activity-Based Costing contributes to accurate cost allocation and improved financial efficiency in hotel operations. The primary data for the study were collected from 188 hotel managers and accounting personnel from selected hotels across Gujarat using a structured Likert scale questionnaire. The findings of the study reveal that respondents have a positive perception towards Activity-Based Costing. The results indicate that Activity-Based Costing provides more accurate cost information, helps in identifying the true cost of hotel services, improves cost control by identifying cost-driving activities, and enhances financial efficiency in hotel operations. The study concludes that adoption of Activity-Based Costing can support better pricing decisions, efficient resource utilization, and improved profitability. Therefore, hotels in Gujarat are encouraged to adopt Activity-Based Costing as an effective cost management practice.