Published Paper Details:

ABSTRACT In today's highly competitive market, there is a shift from standardization to customization, with a strong emphasis on price and quality. Traditional costing methods have become outdated as they often allocate expenses inaccurately, particularly overhead costs. In order to determine fair and accurate pricing, the activity-based costing system has emerged as an innovative solution. Activity-based costing primarily focuses on activities and cost drivers, making it essential to define these activities. The main objective of activity-based costing is to provide a more precise understanding of hotel service costs. By charging prices that closely align with their actual production costs, both effectiveness and profit margins can be improved. Activity-based costing plays a crucial role in the hospitality industry as it reveals the true profitability of customers, identifies opportunities for cost reduction and increased efficiency in various hospitality services, and provides actionable insights to negotiate price and cost reductions for different activities. Utilizing activity-based pricing to determine hotel service prices has been argued to be the most accurate approach. For this research, the study focused on 75 hotel managers working in Gujarat and sought their perspectives on activity-based costing.