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Essay / Increasing Value in the Hotel Industry - 1926
IntroductionThe hotel industry is a fluctuating industry. One reason is that it is an industry that is highly dependent on seasonality (Font, Penalva & Sampol, 2011). Seasonality according to Butler cited in Weidner (2006) is “the temporal imbalance of the tourist phenomenon”. In the hotel industry, seasonality can be illustrated as in a given period, hotels will face their peak season where the occupancy rate will be high and in another period, they will face a low season where the occupancy rate will be high. Occupancy will be lower. The hospitality sector is also fluctuating due to the global economic crisis (Kapiki, 2012). The financial crisis of 2008 could be one of the examples that can explain why hotel managers must always be ready and able to find a way to maintain their hotel business during difficult economic times. After the economic downturn of 2008, it was recorded that the average price of hotel rooms worldwide was 14% cheaper in 2009 than in 2008 (Kapiki, 2012). This in turn led to a decrease in revenue for many hotels. Although lowering room rates may entice guests to book a room during tough economic times, it is not an effective strategy to implement in the long term. There are many strategies that can be implemented to enable hotels to sustain their business and seven strategies are proposed in the case study that hoteliers can apply during the economic crisis. “Increase value instead of lower price” is selected for further evaluation in this study. PricePrice, according to Oxford Dictionaries (2014), is the amount of money paid or given to obtain certain products. Products, in this case, include both goods and services (). In the hotel industry, pr...... middle of paper ......fluences in the European hotel industry. A case study of a four-star hotel in Spain, Germany and England » MA European Tourism Management. http://www.du.se/pagefiles/5053/vosslawrence.pdf [accessed April 26, 2014]. Wagner, N. (2014) “The benefits of word of mouth marketing” Chron. http://work.chron.com/advantages-wordofmouth-marketing-3567.html [accessed April 25, 2014]. Weidner, S. (2006) “Tourism seasonality: examining the seasonality of hotel accommodation in New -Zealand » Grin. http://www.grin.com/en/e-book/122991/seasonality-in-tourism-a-review-of-seasonality-of-hotel-accomodation-in [accessed April 29, 2014]. Wilkening, D . (2009) “Add value, don’t lower the price” Hotel Interactive. http://www.hotelinteractive.com/article.aspx?articleid=14405 [accessed April 6, 2014]. Williams, C., et al. (2003) Quality of services in leisure and tourism. Buswell Wallingford: CABI.