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With the intention of successfully meeting the challenges of an increasingly complex competitive environment, organizations in many industries are rethinking their performance measurement systems. More effective performance measurement features identified include linking operations to strategic goals, and presenting a balance of indicators. Traditional performance measurement systems, meanwhile, typically stress the short term, focusing on past achievements while largely ignoring the drivers of future performance. Concern has been expressed that UK hotels are still focusing on these traditional performance measures – and so may be overlooking important issues, potentially leading to detrimental outcomes. This concern is supported by new empirical evidence obtained regarding the current range of performance measures used within UK hotels. This evidence suggests that although they appear to monitor performance in great detail, with few notable exceptions, UK hotels do appear to emphasize traditional measures and therefore still seem to have some considerable rethinking to do.

For hospitality organizations to compete successfully in the emerging information age, with its emphasis on innovation, quality and speed, it is suggested that they must adopt more flexible, responsive and empowered management structures. However, if such developments are to prove effective, it is essential that hospitality organizations also overhaul their accounting systems, most of which were designed to support the previous industrial era’s focus on volume and productivity. Indeed, there is a concern that traditional budgeting systems – with their typical bureaucratic encouragement of internally‐focused, department‐centred cost minimization – may present a significant barrier to effective change. It is proposed instead that a fresh approach to the objectives of budgeting is needed, involving “alternative steering mechanisms” that promote empowerment, flexibility and knowledge‐sharing. This suggestion is supported by evidence from an American hotel where such a fresh approach to budgeting has been developing, “matching” its more progressive management structure.

One recently developed performance measurement method which may prove more effective for hotel management is that of the “balanced score‐card” – which aims to give management a “comprehensive but quick” view of their organization′s performance. Investigates whether the “score‐card” may represent a long‐term solution to the “superior performance measurement method” the hotel sector is apparently looking for – or whether it is more likely to be just a short‐term, passing fad?