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Pricing Strategies and their impact on Revenue
Pages 10 (2510 words)
Revenue management has been a practice in the hotel industry for approximately 20 years (Anderson et al., 1994). Good revenue management results from a correlation of pricing and hotel occupancy…
Revenue management has been a practice in the hotel industry for approximately 20 years (Anderson et al., 1994). Good revenue management results from a correlation of pricing and hotel occupancy. The study came to the conclusion that the hotels which maximized their revenue tended to have relatively higher prices and did not engage in price undercutting (Enz & Canina, 2008). Another study found that Asian market consumers did not seem to be influenced by discounts (Lomano, 2008). It may be argued that since these studies were conducted in varying Geographical regions and in different economic circumstances, they may offer practical insights that may be used to determine pricing in the hotel and hospitality industry (Varki & Colgate, 2001). There is however a shortage of research as regards the impact of pricing on individual hotel revenues. Markets have had relatively stable occupancy and a steady growth in revenue since the beginning of the century (O’Neil et al., 2006). The changing dynamics of the market through the provision of advertising through the internet and an increase in supply is certain to lead to increased competition. It is thus important that the hotel industry reevaluate their pricing models to reflect their changing dynamics if they are to maximize their revenue (O’Neil et al, 2006). This paper will study the impact of these changing dynamics on the hotel industry with specific focus on individual hotel case studies and other strategies and economic models. ...
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