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PRICE MIX - HOTEL INDUSTRY

Discuss PRICE MIX - HOTEL INDUSTRY within the Marketing Management ( RM , IM ) forums, part of the Resolve Your Query - Get Help and discuss Projects category; PRICE MIX Like other organisations, the hotels and hotel companies also need to make pricing decisions. It is in this ...

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PRICE MIX - HOTEL INDUSTRY
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Sunanda K. Chavan
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PRICE MIX - HOTEL INDUSTRY - October 12th, 2010

PRICE MIX

Like other organisations, the hotels and hotel companies also need to make pricing decisions. It is in this context that we go through the problem of pricing in the hotel industry.The existence and prosperity of hotels and hotel companies are substantially influenced by the quality of pricing decisions. Of late, we find world-wide economic depression and the trend is not likely to be reversed in the near future.

The pricing decisions are beset with many problems. No doubt in it that fixing the hotel tariffs is just like pricing other goods and services.

At the same time, it la also right to mention that the hotel professionals need more excellence while fixing the hotel tariffs since the services are found of perishable nature. In addition, the seasonal fluctuation in demand and increasing intensity of competition also complicate the task of professionals.

They need world class excellence while making strategical and tactical pricing decisions- It is in this context that we go through the problem of price mix. Managing relatively volatile demand around a relatively fixed capacity of highly perishable product supply is identified as one of the principal characteristics of the hotel business.

There are four elements in the strategic marketing response which accommodation supplier-, make to their external business environment, such as planning the most profitable business mix of segments and products, deciding the position or image which each accommodation unit or chain of units should occupy, encouraging and rewarding frequent users of the services and developing marketing integration between units in common ownership (chains) or units in individual ownership (voluntary co-operatives).

Strategic decisions are expected to generate a profitable mix of bookings and room-occupancy through the production and distribution of appropriately priced distinctive products which match the needs and requirements of identified segments.

We accept the fact that pricing menus and drinks in hotel food and beverage areas to obtain maximum sales and profits is a very complex subject.

While formulating the pricing strategy, the hotel professionals are required to take into account a number of factors, specially the diverse nature and character of dishes, involvement of costs and spending power of the customers.

We also need to consider the economic criteria, target average spends, target covers per meal period, current menu and drink prices.

Pricing decisions are found important in both strategic and tactical sense. In the tactical sense, it plays an outstanding role.

This is due to the inseparability and perishability of the hotel products. This is also due to the inability of the service engineering organisations to carry over unsold stocks as a buffer to cope with future demand as found in the goods manufacturing organisations.


Also known as price deregulation, tactical pricing is found instrumental in promoting the hotel business. Experiences show that in the hotel industry, it is found to be a major selling tool. There are a number of ways for practising and benefiting from this tool:

• Seasonal Discounts: Found applicable in the hotel industry. Customary to charge lower prices, specially during the off-season.

• Trade Discounts: Found applicable in the hotel industry as tour operators and travel agents are offered discounts.

• Special Discounts: In the hotel industry, we find special function room rates for overnight convention.
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Jitendra Mazee
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Re: PRICE MIX - HOTEL INDUSTRY - November 21st, 2017

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Originally Posted by sunandaC View Post
PRICE MIX

Like other organisations, the hotels and hotel companies also need to make pricing decisions. It is in this context that we go through the problem of pricing in the hotel industry.The existence and prosperity of hotels and hotel companies are substantially influenced by the quality of pricing decisions. Of late, we find world-wide economic depression and the trend is not likely to be reversed in the near future.

The pricing decisions are beset with many problems. No doubt in it that fixing the hotel tariffs is just like pricing other goods and services.

At the same time, it la also right to mention that the hotel professionals need more excellence while fixing the hotel tariffs since the services are found of perishable nature. In addition, the seasonal fluctuation in demand and increasing intensity of competition also complicate the task of professionals.

They need world class excellence while making strategical and tactical pricing decisions- It is in this context that we go through the problem of price mix. Managing relatively volatile demand around a relatively fixed capacity of highly perishable product supply is identified as one of the principal characteristics of the hotel business.

There are four elements in the strategic marketing response which accommodation supplier-, make to their external business environment, such as planning the most profitable business mix of segments and products, deciding the position or image which each accommodation unit or chain of units should occupy, encouraging and rewarding frequent users of the services and developing marketing integration between units in common ownership (chains) or units in individual ownership (voluntary co-operatives).

Strategic decisions are expected to generate a profitable mix of bookings and room-occupancy through the production and distribution of appropriately priced distinctive products which match the needs and requirements of identified segments.

We accept the fact that pricing menus and drinks in hotel food and beverage areas to obtain maximum sales and profits is a very complex subject.

While formulating the pricing strategy, the hotel professionals are required to take into account a number of factors, specially the diverse nature and character of dishes, involvement of costs and spending power of the customers.

We also need to consider the economic criteria, target average spends, target covers per meal period, current menu and drink prices.

Pricing decisions are found important in both strategic and tactical sense. In the tactical sense, it plays an outstanding role.

This is due to the inseparability and perishability of the hotel products. This is also due to the inability of the service engineering organisations to carry over unsold stocks as a buffer to cope with future demand as found in the goods manufacturing organisations.


Also known as price deregulation, tactical pricing is found instrumental in promoting the hotel business. Experiences show that in the hotel industry, it is found to be a major selling tool. There are a number of ways for practising and benefiting from this tool:

Seasonal Discounts: Found applicable in the hotel industry. Customary to charge lower prices, specially during the off-season.

Trade Discounts: Found applicable in the hotel industry as tour operators and travel agents are offered discounts.

Special Discounts: In the hotel industry, we find special function room rates for overnight convention.
Hey, thanks for your help and sharing the information on PRICE MIX - HOTEL INDUSTRY. Well, i have also a document and uploading it where you would get more information on PRICE MIX - HOTEL INDUSTRY.
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