Additionally, this article reports some outlines in the customer-oriented pricing approaches. The report also indicates some recent years’ complex shifts in the market revenue as well as the development of management schemes within non-manageable revenue. According to the article, the hotel industry experienced a sharp slowdown due to the worldwide economic hardship, financial crisis, and reduction in the consumer confidence. The economic recession experienced by almost all sectors of the economy has been described as an economic phase. The economic phase is interpreted by low rates of occupancy within corporate and leisure departments in the hotel industry. The negative impacts of this phase are expected to continue due to high elasticity of business travel and tourism spending as well as a reduction in the airline carriers (Butscher et al 404). The article also cites the investment drought to be another challenge facing the hotel industry. The economic recession has led to a drop in stocks of the hospitality industry with a greater impact; this is compared to drop in stocks in any other sector of the economy. Subsequently, the private sector attractiveness has been plummeted due to reduction in capital and the unavailability fund for new projects and renovation. Hotels are prompted to have lately carried out renovation and other new projects in the year 2008 (Butscher et al 407). Notably, it may take some time before the hotel industry regains its booking levels compared to the levels noted in the year 2008. The same long span is expected for the funding of the industry for renovation and expansion (Butscher et al 407). Therefore, the future (as per the time the article was being written) profits to be made by the hotel industries depend on the time the recession and downturn will last. According to the authors of the article, the profitability of the hotel industry can only be weighed on cost and prices offered by the market economy. It is worth noting that prices offered by different hotels vary because of either the hotels’ different infrastructures or difference in ownership. The article exemplifies that these prices are expected to have a wider or larger variation if a third party owns infrastructures. Some hotels offer high prices due to the quality of services they offer. The management in some hotels usually carries out infrastructure refurbishment within seven to ten years as a way of maintaining consistent levels of quality across the network (Butscher et al 408). The levels of economic recession are predicted to worsen if corrective actions are not taken within the hospitality sector. Some of the corrective measures that have been forwarded by this article include retaining some fixed costs. That is, maintaining the salaries of the employees and selling unprofitable assets within the sector. Such sales should lead the hotel to large-scale audits. The authors of the article are profoundly concerned with the time at hand for the hotels to execute the proposed plans. However, the time is limited the managements of the hotels should incorporate these plans as part of their strategies of eradicating the present economic crisis (Butscher et al 407). Time is regarded as a factor in pricing since it affects the rate at which stocks are exchanged with the stock market. Straightforward rates are expected to decrease the board
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Name: Instructor: Course: Date: Managing Hotels in the Downturn: Smart Revenue Growth through Pricing Optimizations This article reflects the economic hard time that has hit the hostel industry due to global recession. This economic crisis is described as the worst crisis, to hit hotel industry…
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