Cost and Management Accounting Practices in Indian Hotels: Impact on Efficiency and Service Quality

Abstract

This study investigates the impact of cost and management accounting (CMA) practices on operational efficiency and service quality in the hotel industry of Uttar Pradesh, India. Drawing on the Resource-Based View (RBV) and the Service-Profit Chain framework, the research conceptualises CMA practices as strategic organisational resources that enhance service outcomes through improved operational performance. A quantitative, cross-sectional survey design was adopted, collecting data from 476 hotels across various categories, ownership types, and locations. Using structural equation modelling (SEM), the study examines the relationships between five dimensions of CMA practices—budgeting, costing, performance measurement, decision support, and technology and analytics—operational efficiency, and service quality. The findings reveal that costing, decision support, and technology and analytics significantly enhance operational efficiency, while budgeting and performance measurement show no significant effects. Operational efficiency has a strong positive influence on service quality and mediates the effects of costing, decision support, and technology and analytics on service outcomes. The results highlight the strategic importance of adopting modern, technology-driven CMA practices to achieve operational excellence and deliver superior guest experiences. This study extends accounting and hospitality literature by providing empirical evidence from an emerging economy context and offers practical insights for hotel managers, policymakers, and professional bodies. It underscores the need for data-driven, analytics-enabled accounting systems to strengthen competitiveness and enhance service quality in dynamic hospitality environments.