Mandatory cost and other cost coming from the adoption of quality certifications in the hospitality business

Abstract

The adaptation to the regulation of hospitality business implies a relevant cost in the profit and loss account. Additionally, some companies in this business decide to add some voluntary quality and environmental certification systems, which also yields to increased costs. The purpose of this paper is to quantify these costs and to analyse if the hotel size influences them. A total of 67 different costs were considered in hotels of all sizes, in the region of Catalonia as one of the most relevant touristic markets in Europe. Data were collected from the regulation applied to the hospitality sector, from specialised consultant companies and from a questionnaire supplied to 472 hotels in August and September 2008. The main results of this study show that the unitary cost by room, considering both, compulsory and voluntary costs, is lower in big hotels. On the other side, the smaller hotels are suffering high unitary costs. These results could be useful for the strategic orientation of hotels due to the relevance of costs to determine the competitive position of a firm. The main contribution of this work is to analyse the effects of compulsory costs and voluntary cost derived from the implementation of quality and environmental certifications in the hospitality sector, which could strongly affect the performance of this industry.