COSTING AND MANAGEMENT CONTROL PRACTICES IN THE ALGARVE HOTEL SECTOR

Abstract

The study describes the current costing and management control practices in Algarve’s hotel sector. The study further evaluates the extent of the adoption of the Uniform System of Accounts for the Lodging Industry (USALI, enacted 1926). The paucity of research on management accounting and control systems in service organizations, such as hotels, motivates this research. Data was collected from financial managers of 66 (four and five star) hotels, through personal interviews using a structured questionnaire. Results indicate a high level of adoption of the USALI and of other traditional management accounting tools. However, Activity Based Costing (ABC), Customer Profitability Analysis (CPA), Balanced Scorecard (BSC) and other innovative tools, have low or null adoption rates. Some of the findings reported in the paper are not in line with those from other studies, suggesting that a careful data collection is important to ensure reliability