EFFECTIVE COST MANAGEMENT IN HOSPITALITY INDUSTRY AND AN APPLICATION

Abstract

The fact that the services offered as products in the hospitality are easy to copy and cannot be stocked, and fierce
competition as a result of globalization makes it difficult for the hospitality companies to determine the prices they think
are necessary to reach the desired profit margins.
To determine profit margins necessary for their continuity, hospitality companies must control their costs without
sacrificing from quality and within the market prices.. Especially in the sector where high capital is required, the control
and planning of the costs before they occur is very important. In today's circumstances where cost plus methods lose their
validity, target costing methods that does determine targets cost by subtracting target profit margin from sale price and
design the product according to the determined cost become more critical. As a result of target costing method popularity,
activity-based costing method which is based on determining parts of a service and costs of these parts, needed more than
ever. In light of these, the research aims to find the possibility of applying both costing methods for hospitality companies.
In this context, the study process and results of a defined hospitality operation will be included in the study together with
the literature studies about accommodation operations, target costing and activity based costing issues