Activity based budgeting of hotel food and beverage services: An enterprise sample

Tourism industry has a challenging competition nature. Particularly, efforts to serve excessive customer quantity with low costs call forth 'all inclusive system' in a widespread manner. Cost control has a substantial role in order to monitor all consumption by customers. First step of accurate cost control is preparing budgets in an efficient manner. Therefore, rather than volume based traditional budgets, activity based budgets, which is more instructive to allocate overhead costs to products or services. Utilizing activity based budgeting system at all inclusive food and beverage (F&B) operations is the research problem of the study. Within this context, production process of F&B operations and costing systems analyzed, thereafter activity based budgeting systems and budgeting models discussed. In accordance to the aim of the study, qualitative research approach have adopted and instrumental case study method managed. A five star hotel which manages all inclusive system for 12 years included for the sample of research. In order to data gathering semi-structured interview and document analysis techniques have utilized. Findings showed that budgeting process at the hotel enterprise is parallel to activity based costing for; evaluating sales and costs of previous period, planning next year's sales and costs, determining production amount, planning raw material and supplies and planning labour force. Merely, determining source requirements for enterprise activities, determining activity capacity, costing and budgeting supplies on the basis of activities are neglected by the hotel hotel enterprise. Moreover, absence had determined for allocating costs to F&B activities. Activity plans could be projected to budgeting system. Thus, one could determine F&B activities and supply requirement accurately in order to allocate resources.