This website uses cookies to ensure you have the best experience. Learn more

Pushing Value In The Hotel Industry

3065 words - 13 pages

Hospitality industry is a fluctuating industry. One of the reasons is that because it is an industry that depends highly in seasonality period (Font, Penalva & Sampol, 2011). Seasonality according to Butler cited in Weidner (2006) is “the temporal imbalance in the phenomenon in tourism”. In hospitality industry, seasonality can be illustrated as in a period of time, hotels will be facing its peak season where there will be high occupancy and in another period of time, it will face low season where there will be lower occupancy. The hospitality industry also fluctuates as the result of global economic crisis (Kapiki, 2012). The financial crisis in 2008 could be one of the examples that can serve as a significant reason why hotels manager should always be ready and able to find a way to maintain the hotel business during tough economy times. After the economic slowdown in 2008, it was recorded that the average hotel room rate around the world was 14% cheaper in 2009 than the room rate in 2008 (Kapiki, 2012). This has later caused a decrease in the revenue earned by many hotels. Although lowering the price of the rooms can attract guests to book the room during the tough economic times, it is not an efficient strategy to be implemented in long term. Many strategies can be implemented for hotels to sustain its business and there are seven strategies proposed in the case study for hoteliers to apply during the economic crisis. “Pushing value instead of lowering price” is selected to be evaluated further in this study.
Price, according to Oxford Dictionaries (2014), is the amount of money paid or given to obtain certain products. Products, in this case, include both goods and services (). In hospitality industry, price may refer to the rate of the room that guests pay when they book the hotels’ rooms. During economic crisis, people usually do not spend much money and also do not travel much which has caused the occupancy rate of hotels during this period to be low (Kapiki, 2012). Many hotels have practiced lowering room rate during this time to attract more guest to stay in the hotels. However, it may be a poor strategy to be executed as it means there will be less revenue earned by the hotels which lead to the less profit earned by hotels. Furthermore, in a survey done by Tuttle (2012), it had shown that some guests may perceive low price as having poor quality in the products offered. Therefore, instead of lowering the price during the tough economy times, it is better for the hospitality industry to push up or add in more value into its product.
Value, as defined by Zeithaml cited in Kashyap & Bojanic (2000), is the consumers’ evaluation on the benefits given by a product based on the perceptions of what they obtain and what they give. In other word, value can also be referred to the quality of the product that customer received in return for the money exchanged (Raza, et al., 2012).
Pushing up value, according to the...

Find Another Essay On Pushing Value in the Hotel Industry

Revenue Management in Hotel Industry Essay

1171 words - 5 pages fixed amount of resources, which are available for sale. 2. All resources are perishable. In other words there is a time limit to selling the resources, after which they stop to be value. 3. Different customers are willing to pay a different price for using the same amount of resources. “(Solerno, 2014) Operating all this fact and under influence of fast changing and growing industry there are new tendencies and methods to maximize hotel revenue

Analysis of the Four Season's Hotel and its business strategy in the luxury hotel Industry

7663 words - 31 pages compared to industry averages since external events will likely play a role in all the luxury hotel players. A simple evaluation for hotel expansion would be to compare its revenues to other luxury hotels in its vicinity. Another indicator to determine if the new locations are performing well would be to examine the REVPAR as compared to other FSH locations, in addition to other luxury hotels in the area. This will encompass the amount of value

The Midland Hotel in London

1953 words - 8 pages Introduction: This report discusses my applied study period work experience where I worked at The Midland Hotel. I chose to work at The Midland because I wanted to gain experience at a hotel located in the United Kingdom because I wanted to have a global view of the hospitality industry. In this report, I intend to cover the following areas: an overview of the business, structure of the company, current market position, product information and

The Pegasus Hotel in Jamaica

699 words - 3 pages be done are; creating new attractions and sustainability of services. Inseparability- this means that the service that is provided to the customers can not be separated from the service provider, in this case the employee becomes a part of the service. In the hotel industry, customer plays an important role in the production process as the customer’s presence and active participation is vital to the service encounter. Service providers

Impact of Guest Opinions on the Hotel Industry

1229 words - 5 pages understand how customers choose where they are going to stay. Research carried out by Market Metrix research company on January 13, 2010, shows that nowadays customers value guest experience factors in favour of location or even price. In previous years however, the location was the main criteria that potential customers looked at when selecting hotel. In the Exhibit 1, you can see this information. It must be said that hotels in different


1942 words - 8 pages Conclusions In conclusion the Internet has played a pivotal role in transforming industry value systems. It has affected some areas in more ways than others. Logistics and operations have been completely transformed in coordination with globalisation while marketing and sales has found new audiences the world over. With technology constantly evolving, supply chain management is changing with it and (with the Internet linking them together

What value does a focus on the Gold Standards have for The Ritz-Carlton Hotel Company?

805 words - 3 pages The Ritz-Carlton Hotel Company, L.L.C.What value does a focus on the Gold Standards have for The Ritz-Carlton Hotel Company?The Ritz-Carlton Hotel Company aims to succeed in one of the most logistically complex service businesses. Targeting primarily industry executives, meeting and corporate travel planners and affluent travelers, the Atlanta based company manages 25 luxury hotels that pursue the distinction of being the very best in each

A case analysis of the Irish Hotel Industry with specific reference to the City Hotel (a fictional Hotel and it's problems with Human Resources

3806 words - 15 pages . The average room occupancy of 50 -100 room Hotels in Ireland in 2002 was 63.3 % (Horwath Bastow Charleton Hotel Industry Surveys 2000-2002)Due to seasonality, political and economic events, some hotels are finding it difficult to maintain profitable occupancy levels and have started to provide services along a multitude of levels within the industry's value chain, from Internet reservations to providing transport from airports. Thus, the changing

Importance of Setting in The Blue Hotel

1514 words - 6 pages Importance of Setting in Stephen Crane's The Blue Hotel    In  'The Blue Hotel,' Stephen Crane uses various provocative techniques to ensure that the setting adds to the richness of the story. 'The Blue Hotel' is set in a cold Nebraska town at the Palace Hotel in the late 1800's, but there is more to setting than just when and where a story takes place.  In a written work, it is the author's job to vividly depict events in order to keep

Social marketing: building brand value and influence in the UK tourism industry to sustain brand consumption in the current economic recession

772 words - 3 pages Social marketing: building brand value and influence in the UK tourism industry to sustain brand consumption in the current economic recession 1.0 Chapter one: introduction 1.1 Background The current economic recession that began in June 2008 and intensified in 2009 had an effect of decreasing international tourism which was also augmented by outbreak of AH1N1 flu virus in 2009 which resulted into restriction of international travel. The

Conspicuous Consumption in the Ponce de Leon Hotel

1189 words - 5 pages The Ponce de Leon Hotel first opened its doors on 1888 right in the middle of what was known as the Gilded Age, a time period that was marked by rapid industrialization, expansion of nations into a structure, free market economy with almost no regulations, rise of captains of industry, emergence of organized labor, and age of conspicuous consumption. The creator of the Ponce de Leon Hotel was Henry Flagler, one of the captains of industry who

Similar Essays

Types Of Rooms In The Hotel Industry

788 words - 3 pages In the hotel industry with a certain service satisfy to customer needs. It was different and includes the different of customers as well. It is based on the theories of Maslow. That divides the different needs of people, from basic needs to the highest demands. This, in the hotel industry had been variety of services that reflect the level of customer needs. In each hotel have a wide variety of structures and designs vary. In order to meet the

Hotel Industry In China Essay

1302 words - 6 pages Hotel Industry in China Global economy: Global activity strengthened during the second half of 2013, as anticipated in the October 2013 World Economic Outlook (WEO). Activity is expected to improve further in 2014–15, largely on account of recovery in the advanced economies. Global growth is now projected to be slightly higher in 2014 at around 3.7 percent, rising to 3.9 percent in 2015, a broadly unchanged outlook from the October 2013 WEO. But

The Hotel Industry Essay

684 words - 3 pages The hotel industry is always changing, whether it is employees, managers, or owners. Sometimes even the specific hotel brand switches. Even though some hotel chains are stepping up with wages and benefits, there are still lower end chains that do not offer such compensation. When a hotel property sells and new owners take over, in the end it hurts the employees. It has been, undoubtedly, a great 26 years at one of the busiest hotels in Saint

The Use Of Smart Technology In The Hotel Industry

3144 words - 13 pages The Use of Smart Technology in the Hotel Industry The use of smart technology in hotel industry has been identified as the current dynamic change that is being implemented in the hotel industry. In order to improve efficiency and customer satisfaction, hotels have decided to enhance communication – by adopting current information technology; the handling of customer have been improved with an aim of competing in the current market that seems