Question

What is economic value? Give an example of how you would determine the economic value for a particular hospitality service.

Answer 1

The economic value is the value of a good or service measured in economic terms. This value is the benefit provided by the good or service and is measured by money that a person is willing to pay for that good or service. The economic value is important because it measures the value of a good or service.

Economic value for a particular hospitality service - In today's world, the hotel and lodging sector is one of the booming sector in hospitality industry. When I check-in a hotel, from reception to staying in and fooding, everything is important to me. So, before staying in that hotel, I will first check the room where I will stay. The economic value of that room will depend on the condition of the room, the surrounding environment and other facilities associated with the room. After watching everything, if I'm willing to pay the money what that hotel is charging, i.e., if my economic value for the room matches the room rate, then only I will check in that hotel. Now, in case of dining, I may dine in that hotel or I may dine in restaurant outside that hotel. If I'm satisfied with the food provided by that hotel and if I'm willing to pay the money charged for that food, then only I will dine in that hotel. In this case, the economic value that I am giving to that food depends on my satisfaction level. If the economic value of the food,i.e., the price I'm willing to pay for the food is lower than the price charged for the food, I will search for restaurant outside that hotel.

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