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IMPLEMENTATION OF TIME-DRIVEN ACTIVITY-BASED COSTING SYSTEM AND CUSTOMER PROFITABILITY ANALYSIS IN THE HOSPITALITY INDUSTRY: EVIDENCE FROM IRAN

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Author(s): Zohreh Hajiha | Samad Safari Alishah

Journal: Economics and Finance Review
ISSN 2047-0401

Volume: 1;
Issue: 8;
Start page: 57;
Date: 2011;
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Keywords: TDABC | customer profitability analysis | hospitality industry.

ABSTRACT
The purpose of this paper is examination of implementation feasibility of time-driven activity-based costing system (TDABC) in hospitality industry and analyzes profitability of various costumer groups by this system in Iranian context. The results of this system were compared with those of traditional costing system in an Iranian large hotel named Parsian Hotel (as a case study). Regarding to the goal of the subject, this is an application research by case study. The results showed that using TDABC model, in comparison with the existing traditional system in Parsian Hotel, provides more proper data on cost and profitability of customers. Also, the proposed model distinguishes non-added value activities and demonstrates real capacity of each parts of the hotel. Therefore, managers of service companies, especially in hospitality industry, can calculate necessary time for activities by time equations in TDABC. Thus they can do necessary actions to decrease this time and increase hotels’ profitability.
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