Strategic Cost Management in Tourism Industry: Application Areas of Target Costing and Activity-Based Costing Methods

Abstract

The tourism industry plays a significant role globally in promoting economic growth, generating employment, and enhancing cultural interaction. It is particularly strategic for developing countries, as it provides foreign currency inflows and stimulates local economies. However, the sectors within this industry faces several challenges, including high fixed costs, low profit margins, intense competition, and seasonal fluctuations. Therefore, achieving sustainable success requires businesses to focus not only on increasing revenues but also on effective cost management. This study examines the applicability of target costing and activity-based costing within the framework of strategic cost management in the tourism industry. Target costing offers an effective tool for pricing and cost control, especially for small-scale enterprises, while activitybased costing supports more accurate decision-making processes through activity-based cost analysis in large-scale organizations. The study reveals that the combined use of these methods enhances cost optimization and profitability, while also highlighting gaps in existing literature.