A Study Of Application Of Strategic Cost Management In The Economy Hotel Industry

Since1996Jinjiang Star as China’s first economy hotel brand was founded in Shanghai,economy hotels began a course of development.In recent years, In the current hotel industry, a traditional high Stars Hotel still continues its comfort and safety advantage, but the high cost of accommodation made it cannot become the most economical type of traveler choice. On the other hand, the smaller hotel can save accommodation cost, but has some hidden safety problems, and hotel comfort degree is reduced greatly. Econo Hotel found a compromise between safety and comfortable with the price of the accommodation., so it becomes more and more popular. In recent years, the rapid development of Econo Hotel in the country, attracting many domestic and foreign well-known brands, which exacerbated the degree of competition in this market segments, which makes Econo Hotel pay more attention to enterprise management, especially on its cost management. Presence of introversion, myopic, lack of global view and other defects existed in the traditional cost management mode, but the strategic cost management mode has superior characteristics, such as extraversion, long-term and comprehensive, which is able to compensate for the defects. and becomes a modern enterprise cost management reform and applied to the present stage of Econo Hotel.This paper firstly introduces the basic theory of strategic cost management, then use the strategic cost management of the three commonly used analysis tools——Strategic positioning analysis, strategic value chain analysis, strategic cost driver analysis to analyse the case of Philharmonic Hotel. Try to set up the mode of strategic cost management suitable for the Econo Hotel. This is not only beneficial to strengthen cost management, gain or maintain a cost advantage, and will strengthen the implementation of the strategy, help the hotel to regard the cost management as a strategic management service, and obtain the long-term competitive advantage. This paper is divided into six chapters to introduce the strategic cost management in the application of Econo Hotel. First of all, as a background analysis, this article introduces the present situation, prospects of Econo Hotel in China, and puts forward that the cost management is an important content of the management of Econo Hotel, Then it elaborates the research significance and research methods. Then, In the literature review, this paper introduces several kinds of Econo Hotel cost management pattern and the current situation of the application of strategic cost management.Before the combination with the Econo Hotel industry, this paper briefly introduces the basic theory of strategic cost management. Including the defination of Econo Hotel, the strategic cost management theories, especially its connotation, significance, objectives and characteristics. In the next chapter, it analyses the application of strategic cost management in Econo Hotel from the theoretical level, which is the most important chapter. Firstly, this paper analyses the competitive environment Econo Hotel now is facing, then puts forward the competition stage Econo Hotel should take, then, summarizes the problems the hotel faces in the use of the traditional cost management, and proves the hotel with a more suitable strategy cost management mode. Finally, in the last three parts, this paper illustrates how to use three commonly used analysis tools to analyse strategic cost management in Econo Hotel. After the theoretic analysis,this paper selects the Philharmonic Hotel as the analysis object, applicate the strategic cost management analysis methods introduced in the fourth chapter in this specific case, the purpose is to demonstrate the strategic cost management model is feasible in Econo Hotel. Finally, this paper makes a summary of the whole thesis.The innovation of this paper lies in applicating the strategic cost management model to the Econo Hotel, enriching the application research of strategic cost management. The deficiency is this paper didn’t find suitable method to evaluate this tentative plan, which is a real problem to be resolved in the current strategic cost management theory.