Competition and Season on the other hand are the other factors. If there are other hotels nearby, a hotel should carefully set their room rates at the right amount if not guests will opt for other hotels with good room rates. Now a day’s most hotels have embraced the use of technology to attract more guest, example use of social media, websites and mobile applications. By the use of mobile applications, guest can make reservations very fast and easily. The social media and websites are used as way of marketing themselves. Winter season the demands for some hotels is high and the demand for others low. In the area where the winter is, harsh guest will fear from going there but what happens most of the time guest tend to go to areas where it is warm. Therefore, hotels in winter suffer a lot if they do not have facilities to attract guests. Example of such facilities is the ice skiing, wooden cabins and indoor fishing. (Thrane, 2007).
Imagine opening a small hotel in the town in which you attend class (or your hometown if taking classes online). Briefly describe the hotel and determine how you would determine the proper room rate. Please be as specific as possible.
In my hometown area, I would consider Hostel Accommodation as the appropriate hotel for students. Hostels would be the best for students because considering that they have to tuition fees and other expenses during their stay and study at their Educational Institutions. The hostels will have two wings, one side for female students and the other side for male students. The building will be three story high and each floor having ten cubicles. Each cubicle will accommodate four students. For bathroom facilities, there will be ten shower areas and ten lavatories section on each floor. The hostel will only provide breakfast and dinner; lunch on weekends and public holidays only. (Law, Chan, & Goh, 2007).
The things that will help in deciding the room rates apart from considering that we are dealing with students is the Location, Competition and Demand. If the location is far from their University then room rates should not be high because the students will have to for means of get the university. This may end up making them paying for their means of transport. Competition being the second factor here, also the room rate should not be so high, but if there is no competition, then the room rates can be slightly high compared to the once that might be there. Demand the final factor will largely depend on the student turn out. When opening the hostel for the first time the demand will be very high depending on the room rate for first factors to be considerable for the pocket of the students. If the room rate were too high for the student to pay then demand would not be high and the turnout of students low. (Thompson, & Failmezger, 2005).
Reference
Thrane, C. (2007). Examining the determinants of room rates for hotels in capital cities: the Oslo experience. Journal of Revenue & Pricing Management,5(4), 315-323.
Law, R., Chan, I., & Goh, C. (2007). Where to find the lowest hotel room rates on the internet? The case of Hong Kong. International Journal of Contemporary Hospitality Management, 19(6), 495-506.
Thompson, G. M., & Failmezger, A. (2005). Why customers shop around: A comparison of hotel room rates and availability across booking channels. Cornell University, School of Hotel Administration, The Center for Hospitality Research.
Hiemstra, S. J., & Ismail, J. A. (1993). Incidence of the impacts of room taxes on the lodging industry. Journal of Travel Research, 31(4), 22-26.
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