Pricing Strategy of Hotels in Less Developed Regions
This article has analyzed the influential factors of hotel prices and discussed how to promote the prices potential in less developed regions from the basic law which is based on maximum profit principle so as to execute revenue management pricing strateg
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Pricing Strategy of Hotels in Less Developed Regions Huang Li Abstract This article has analyzed the influential factors of hotel prices and discussed how to promote the prices potential in less developed regions from the basic law which is based on maximum profit principle so as to execute revenue management pricing strategy. The author puts forward some suggestions that hotels in less developed regions should improve the value of its products and service and guide the consumption demand in order to achieve price discrimination. Keywords Hotel prices in less developed regions • Influencing factors • Price discrimination • Pricing strategy
21.1 Introduction The price is an important factor in the management process of hotels, and how to set the scientific and reasonable room price is especially important. Competition of hotels is fierce in less developed regions, as profits of guest room take up more than 50 % of the hotels’ revenue more, so the establishment of house prices is the key step of marketing and the important decision for hotels, which is also the key factor affecting the revenue and profit. To achieve maximum profit for hotels in the less developed regions, the establishment of house prices needs to break limitations of the local economic environment, and raise the price to realize the yield management [1, 2].
21.2 Status of the Hotel Rooms Pricing in Less Developed Regions The hotel rooms pricing is one of the main strategies of the hotel management. The guest room price in less developed regions is affected by variable costs, market structure, capacity of the guest room and changing needs, so the pricing is H. Li (*) Business College, China West Normal University, Nanchong 637002, Sichuan, China e-mail: [email protected]
Z. Zhong (ed.), Proceedings of the International Conference on Information Engineering and Applications (IEA) 2012, Lecture Notes in Electrical Engineering 220, DOI: 10.1007/978-1-4471-4844-9_21, © Springer-Verlag London 2013
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one-way thinking and takes a one-sided approach to pursuing the short-term profit and lack of overall strategic thinking. What’s more, rivals is always competing the price regardless of the cost, so the pricing and the quality of hotel itself do not match, and the price and the discount are both in a state of disorder and confusion. Specifically, these are the following problems:
21.2.1 Insufficient Consumption Demand and Low Room Income Consumption demand and amount are subjected to regional economic development, while the hotel rooms demand is affected by consumption level, so in less developed regions the main consumption object of hotels focus on the business guests from developed economic or tourists in boom season. In addition to consumption demand and rivals’ price, the room price is also affected by the season and some other factors. Consumption demand is obviously insufficient, so the room price is different for even the same star level or brand hotels compared to the hotels in first-tier cities or developed areas. In th
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