The applicability of management accounting techniques within the Maltese hotel industry

Abstract

Purpose: The purpose of this study is to determine which management accounting techniques are applied within the Maltese hotel industry and how the adoption and non-adoption of these techniques impact the performance of local hotels. Design: An empirical census survey was sent to all the three-four-and five-star hotels. The survey yielded a response rate of 41%. After a statistical analysis of the data was carried out, a sequence of interviews was conducted to analyse the findings in more depth with experts from the industry. Findings: The survey reveals that although there was a variation between three-four-and five-star categories in the management accounting techniques used, overall, traditional techniques such as marginal costing, traditional budgets and financial measures to assess performance were widely adopted. Moreover, low adoption rates of the balance scorecard and activity-based costing indicate that Maltese hoteliers do not readily adopt the contemporary management accounting techniques. On the other hand, target pricing and benchmarking tools are widely adopted by hotels in Malta. Conclusion: This dissertation sheds new light on the applicability of management accounting in the context of the local hotel industry. It was clearly demonstrated that all the techniques applied depend on the contingent factors, which vary from one hotel to another. Value: This research provides a comprehensive assessment of the management accounting techniques used by Maltese hoteliers. As a result, together with the recommendations given, the study contributes towards reinforcing the future contribution of management accounting to the local hotel industry.