In: Operations Management
"The Role of the Room Rate" Analyze the hotel market in your state and determine if the room rates for the majority of hotels is elastic or inelastic. Explain your rationale and identify contributing factors (e.g., tax rates, competition, etc.). Imagine opening a small hotel in the town in which you attend class, Briefly describe the hotel and determine how you would determine the proper room rate.
In my state, hotel room rates are elastic. As my state concludes
with many tourist spots, prices of the rooms changes according to
the season and availability of the tourist are my state. This type
of changing room rates is available throughout the whole estate and
availability of the hotels is extreme as there are so many tourist
available for the accommodation.
Due to the extreme competition these prices also vary to capture
more of the market segment and for attracting more customers.
Different competitive techniques such as provision of Huge
discounts on the basis of the days you are staying in the hotel as
well as online booking discounts are also present.
I haven't had to open hotel in my town determine the room rate
according to the availability of the rooms and the overall customer
availability in the specific market segment. By looking into the
total growth rate of the organisation as well as determining
closeness of the hotel to talk to the spot would be my main concern
for determining the room rate as room rates are basically
determined through the closeness to the tourist spots in my
state.