The implications of the all-inclusive resort model on food cost practices

Abstract

Purpose: This dissertation aims to determine if the All-Inclusive (AI) Resort model has had any impact on food cost practices, and if yes, whether the change towards more adequate food costing practices is a must or an option. Furthermore, this dissertation attempts to determine the necessary changes to convert a traditional hotel into an AIResort Food cost wise. Finally, this dissertation will attempt to determine whether there are any other accounting implications. Design: A total of 12 interviews were carried out with hotels offering AI-Packages. Due to the different operational strategies each interviewee works in, the use of semistructured interviewing opens new possibilities in gaining knowledge. Findings: The findings highlighted the importance of fully converting a traditional hotel into an AI-Resort to benefit from all the advantages proposed by the concept. The benefits are dependent on the ability to change along with internal and external circumstances and develop an effective costing system based on the change in concept. The most critical change effected by fully converted AI-Resorts relates to the treatment of the food department as a cost centre. The findings also revealed that even if the total food consumed by guests residing under the AI-Package is much higher than that consumed by guests residing under other packages of stay, the consumption per meal per guest is relatively less. Furthermore, it was identified that the establishment of AIFood cost practices for the first time in a fully converted AI-Resort is not simple. In fact, research and on job observation by top management is necessary and training was carried out through strategic alliance with AI-Resorts abroad. Finally, the findings also related how the environment around AI-Resorts does not affect the food consumption of AI-Package guests. Conclusions: This dissertation concludes that effective costing systems play a key role in the success of implementing AI-Packages. The ability to change completely the management accounting structure in relation to food cost, allows for: better determination of costs, easier comparability, and budget preparations. Value: This dissertation extends the knowledge of food cost practices in the context of AI-Resorts. Furthermore, this dissertation proves to be useful for other organisations considering a similar change in the hotel structure.