Question

In: Operations Management

"The Role of the Room Rate" Analyze the hotel market in your state and determine if...

"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.

Solutions

Expert Solution

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.


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