About this project
Restaurants are clearly part of the experience industry but managers get little information and support from the accounting system in their efforts to create memorable meal experiences for their customers. The objective of this study is to empirically assess how an accounting system can be better aligned with the production of customer experiences. First, total costs are allocated to the production of four major types of experiences in a restaurant: basic food, culinary finesse, atmosphere, and service. This is followed by an analysis of customer evaluations of a meal experience categorised into the same four components. The study is based on empirical accounting data from three restaurants and an explorative study of how their customers evaluate an ideal as well as an actual meal experience they had in that restaurant. Experience evaluations are made in monetary terms, using the contingent valuation method, and the value of an experience can be compared with the cost of producing it. The analysis of the production cost compared with the value created indicate that, on average, the restaurants need to reallocate resources from service and basic food expenses to invest in the interior atmosphere of the restaurant to meet customer expectations.
One major objective with budgeting and management accounting is to focus on how costs are allocated to various activities in a firm. Experience accounting (EA) sets a focus on how resources are used to create customer value. There is a large variation among hospitality firms as to the amount of time and interest devoted to budgeting and cost analysis and for many restaurant managers accounting in its simple form is already too burdensome and or too tedious for the manager to spend time on.
Based on the foundations described above there are several way to develop EA further. To add a sustainability level could be the first step, but an adaptation to hotels, arenas & large venues and canteens could be other interesting alternatives.
Andersson, T. D., & Carlbäck, M. (2009). Experience accounting: an accounting system that is relevant for the production of restaurant experiences. The Service Industries Journal, 29(10), 1377-1395.
Carlbäck, M. (2010). From cost accounting to customer accounting in the restaurant industry. International Journal of Revenue Management, 4(3-4), 403-419.