Price Discrimination In Hotel Industry

The main claims that are presented in the article are the prices of hotel rooms during Super Bowl weekend, in a city with a tiny hotel market, are pricey, along with other options as well. The evidence that supports these claims are rankings from various hotel websites, articles from newspapers regarding prices and numbers of hotel rooms, prices directly from hotels and primary sources, and articles from TV news stations. I believe that these claims are valid, due to the credibility of the author, sources, and evidence. Even though the article does not get into the minor details and definitions of economic aspects, it is still a well written piece that easily demonstrates how supply and demand affects our

Everyday low pricing can lower our operating costs in two different ways. It can reduce inventory and handling costs due to more steady and predictable demand. It can also reduce labor costs related to less frequent temporary price reductions.

Another vertical differentiation is the service on board. Most low-cost airlines try to maintain cost-effectiveness or lower their cost by not offering additional service to the passengers such as extra foods and drinks. However, Nok Air does provide a box of Auntie Anne bread, and beverages to the passengers during onboarding, while Air Asia provides nothing. This is considered to be the vertical price discrimination because all passengers agree that having some foods and drinks during on boarding is better, but there is no guarantee that food served by Nok Air is the best choice for them.

Marriott International vs. Airbnb Although Marriott International has a competitive advantage of being the largest hotel company in the world, experiencing years of remarkable growth with the acquisition of Starwood Hotels, and ranking at number 163 on this year’s Fortune 500, it operates in a highly competitive market. The recent success of Airbnb, for example, has had major effects on the hotel industry as it has quickly become a threat. Airbnb, founded in 2008, is an online hospitality service that provides short-term lodging and unique travel accommodations around the world with more than 3,000,000 lodging listings in 65,000 cities and 191 countries.

Subscription Model in SaaS businesses Introduction to SaaS Software as a Service (SaaS) is a business model where the software is developed and hosted by the vendor and the user accesses it using the internet. The end user customer doesn’t need to install the software on his/her computer, as the software is hosted on the vendors servers, the customer can access it using the internet. It is most popularly known as hosted software or On-demand software. The customer does not own the software, he pays a monthly/yearly fee to rent it.

Every industry to include the hospitality industry is impacted by external factors which directly influence organizational behavior and decision making. There are numerous factors to be considered, but political, economic, and social are three of the most influential. These outside factors sway managerial operational decisions daily regarding personnel, spending, policy, and short-term and long-term strategic planning concerning both core and exterior operations. As within every industry, the hospitality industry has unmanageable elements that affect management or ownership of hospitality establishments (Lewis 2017). Understanding these factors is important because it provides an opportunity for contingency planning (Lewis, 2017).

They offers only five star and four star room and the company is able to charge its customers at premium level. Place The goods and services provided by the hotel made available to the customers at a place where they can conveniently make purchase. It refers to the channel or the route through which goods and services move from the source to the final user. Place could be the intermediaries, distributors, wholesalers and

1 What is Outrigger Hotels and Resorts’ strategic position? What are the firm’s Critical Success Factors (CSF)? Outrigger Hotels and Resorts are currently using geographical and product diversification strategy. The firm expend their firm around Pacific Ocean and diversify its product portfolio by adding condominiums resorts and OHANA hotels.

The tourism industry contributes significantly to the worldwide economy, employing 200 million people and representing 10% of global GDP (Socci, 2016). International tourism is defined as a person or group of people temporarily visiting a foreign country and the activities they partake in while abroad (Filiposki, 2014). Socci expands on the definition by identifying ten primary sub-industries that combine to form a more aptly named tourism “cluster.” These sub-industries include: accommodation services; hotel and restaurant; food and beverage; land transport; water transport; rail transport; air transport; supporting transportation services; recreational, cultural, and sporting services; and retail and country-specific tourism (2016). In 2014, foreign tourism generated $1409 billion, which was 30% of global service exports (Filiposki, 2014).

According to Wisnudewobroto (2011), KFC placed their products for high price but not overly high. However, to compete with other competitors, KFC trickle down their price for only the selected items during mealtime to focus on both middle and lower class people to penetrate both sides of the market. If the product price are too low, it might lead to customer perception that the food have a poor quality, while charging for the product too high price might cause customer to switch their preferences to other competitors. KFC also will take into consideration on the probable reaction from other competitors in the pricing

One of the characteristic of service like variability services are highly variable due to service quality depends on who provides, where and when they are provided. Variability is opposite meaning of consistently which mean no fixed pattern and hard to change or control. Variability is a negative attribute for a hotel because it can be defined as risk and uncertainty. To avoid any barriers to hotel’s operation, it is important to identify types of customer variability and then create strategies to manage variability Four Seasons Hotel uses reduction strategy to deal with arrival variability by offering room reservation services. It requires guest to make room appointments or reservation first due to people will not want the service at the same

The pricing strategy or pricing policy is one of the most important managers make for a product as it affects the profitable outcome and competitiveness that a product may make. (Toni, 2017). A business can use a variety of pricing strategies when selling a product or service. The price can be set to maximize profitability for each unit sold or from the market overall. It can also be used to defend an existing market from new entrants, to increase market share within a market or to enter a new market by dropping the price or offering more benefits with the device such as packages.

The Five Competitive Forces of Industry will influence prices, costs and investment (Porter, 1980). The potential retaining of customers, profitability of a holiday inn can be determined by being aware of the strengths and weaknesses of the hotel industry. (Figure 2.2: Porter’s Five Forces Model (Source: Adapted after Porter,2008) Porter’s 5 model helps in success of Holiday inn between suppliers and buyers. Giving customers the service they are looking for, acquire customers, retain customers and looking externally how the competitors are doing is very important. To ignore the power of customer relationship is not an option.

Objectives 3.1 Focus on airport resources and technology to improve on time flights, arrival, baggage handling. Caribbean Airlines objectives are to have a flowing routine, by allowing customers to check in their baggage at any time and remove the fixed time according to the customer’s flight. The customers can enjoy the freedom of having lunch with families without the hassle of dragging multiple bags behind them. Another objective would be to improvement of flights scheduled, meeting each and every customers boarding time and even arriving to their destinations before time 3.2 Continue to develop and deploy travel innovations Caribbean Airlines will focus on a more innovative aircraft interior, giving passengers more leg room and better

For example, the company evaluates competitors’ prices as basis for pricing AmazonBasics products. The advantage of this pricing strategy is that it makes selling prices more competitive, affordable and attractive to target consumers. On the other hand, the price discrimination strategy involves setting different prices for the same product. Amazon applies this pricing strategy through its different websites. For instance, the company’s prices for the same products are different between the United States and the United Kingdom, which has its own Amazon website (amazon.co.uk).