Chapter 6  Listen with Empathy – good  Reinforce importance of

Managing Diverse employees in a management requires great listening skills recognizing customer diversity -  Netherlands, orange is the national color
Multicultural Organization and empathy. Make sure all your employees show genuine and associated with the Dutch Royal family.
Multicultural Organization – one that has a  Be An Example. sense of fairness and goodwill, and take
workforce that includes people f rom diverse  Using the Best Elements of each customer requests seriously, no matter what  Egypt associates orange with mourning.
backgrounds across all departments and which Culture- shedding personal prejudices to their race, religion, social status, or other  Colors should communicate desired
offers them equal opportunity for input and avoid imposing one’s own culture on characteristics are. values/emotions and reveal your product
advancement within the company. others is a major challenge for managers of  Know your customers and seek out attributes.
- recognizes the contributions of its multicultural work environments. culture-specific knowledge - Whenever
employees include perspectives based on culture,  90 percent of snap judgements about
 Speak Your Employees Langguage. it’s possible, spend time to learn about products can be based on color alone.
gender, and unique characteristics. Advantages of working in a Multicultural where your customers are f rom, and get a Choosing the right colors can have an
Fives Dimensions that define the culture: Organization basic knowledge of relevant world views, immense impact on increasing your
1. Individualism vs. Collectivism –  Enhanced Creativity -Creativity is one values and beliefs. conversion rates. Consumer perceptions of
measures to which individuals are integrated of the most integral drivers of success for  Listen actively and recognize the appropriateness of the color in relation
within a group. any organizations regardless of industry or patterns for communicating - A to your product is more important than the
 Individualist societies ( US, sector or creating or indeed working in a good practice here would be to pay attention color itself.
France, Australia , Great Britain)- multicultural environment will result in the to customer communication traits and mirror Cultural Differences and Advertising
prioritize personal objectives. ideation of many groundbreaking ideas, them to increase the effectiveness of Cultural differences can make or break the success of
 Collectivist Societies ( Arabic and initiatives and concepts. interaction, your advertising strategies
developing countries )- value the  Broader Thinking  Create a welcoming environment by
goals and well being of the whole  Germans are information-oriented. They
 Scalability having a diverse workforce - Hiring
group. like to know a lot about products, read
 Experiences bilingual employees who not only speak
2. Masculinity and Femininity - measures detailed price / feature comparisons and
Chapter 7: some other language but also have unique
a society’s view of masculine values , value honesty over hyperbole and promises.
Customer Diversity: Providing Great insights into different cultures.
competition, ambition power and  Cultural Differences Apply Even When
Customer Experiences Across Culture  Share your experiences with
materialism while feminine values Customers Speak the Same Language
 Nations and communities are colleagues to work out consistent
relationship quality, harmony and the  You must acknowledge unique cultural
becoming more diverse. Due to advances in approaches - Dealing with customers f
pursuit of consensus. characteristics and business practices, even
communication, the spread of e-commerce rom other cultures provides a great
3. Power Distance - extent to which group in the case of countries that speak the
and the ease of travel, many businesses opportunity to learn f rom others and grow
members accept unequal distribution of same language. English itself is not a
today can expand to cross cultural and in our humanity.
power. uniform language, varieties of English:
geographic boundaries.  Cultural Awareness - ability to recognize
4. Uncertainty Avoidance - a society’s American, British or Australian.
 Rapid changes in technology, modern day the different beliefs, values, and customs
tolerance of uncertainty and ambiguity. Chapter 8
customers have grown comfortable with that someone has based on that person's
5. Short-Term vs. Long Term How to assist guest with their special
shopping online. origins, and it allows a person to build
Orientation - short term orientation needs
Professionalism – a skill, good judgment and more successful personal and - Anticipating guest’s needs and assisting
prioritize traditions and norms at the expense polite behavior that is expected f rom a person who is professional relationships
of change which they view suspiciously. guests in fulf illing their special needs are
trained to do a job. in a diverse environment. the prime jobs of a hotelier.
- prioritize long-term thinking see Old golden rule: treat others the way you want Cultural Differences and Customers’
change as inevitable, value accolades and Here is the list of special guests:
to be treated. But simply treating customers with the Perception of Color :  Aged or elderly guests
encouraged efforts to adequately prepare for same courtesy and dignity is no longer enough in  Cultural awareness is useful when you
the future.  Infant and young children
this shrinking world. choose colors for your website, brand or
The Key to Managing a Multicultural Team Making cross-cultural customer when your product comes in various
interactions simple colors.
  Disabled or handicapped guest (e.g. - blind, 10. A pro-active attitude is required while handling 1. Required cutlery 1. Offer your hand to escort the guest to
deaf or wheelchair dependent) guests with disabilities. 2. High chair the table
 Non-native guests or foreign language 11. In case there is a disabled guest staying in the 3. Any special food recommended 2. Read the menu and describe
speaking guests room, this will be mentioned in all departments shift 4. Whether allergic to any food or not buffet(if required)
 Single or solitary guests briefings and also informed to the hotel security  Provide clean and presentable baby chair or 3. Fill plate at buffet for them
Guests who have health issues, such as: department. high chair (if required) and set it properly  If the guest has hard of hearing then try
 Heart patients 12. In case of an alarm raised f rom the disabled to avoid any accident to deal with the guest through the lip
 Allergic to some foods guest room then the adequate reaction of the staff  Offer bread and crackers immediately after reading or body language or gestures
 Special dietary needs present should be ensured. the child is being seated Serving non-native or foreign language-
Handling Check-in and Check-out for 13. An In-room check-out option is provided for  Present the children menus (specially speaking guests
Disabled Guests disabled guests, but the billing process is done like made for children) - Always approach a non-native guest with a
Disabled Guest Special Treatment While any other check-out.  Place the order (serve the children f clear and quiet tone
Check-in or Check-out: 14. In case any assistance is required, the irst) after the order is being taken as per  Try to communicate with a non-native guest
1. The reception or the f ront desk team should requirement by using a common language for both of
receptionist will provide this.
provide special assistance and care while check-in or  While serving the children remember that you
15. The f ront desk team should make sure that
check-out is done for guest with a special need or such guests are treated with the same respect as any their meals should be eye catching and  If you are unable to communicate with him
disabled guests. appealing then ask for permission f rom the guest to f
other guest.
2. The specially designed disabled room should be How to serve special guests:  Offer to cut the food after the child is seated ind a personnel or a person who can help to
blocked for such guests, and a no te or trace to be Serving aged or elderly guests: and the meal arrives communicate
put on the reservation to do not de-block the room for  Escort the guest to the guest table and help Serving disabled guest  If necessary, use a translator to deal with the
other guests. him/her to be seated  Offer the help before the guest is being guest or ask a colleague who knows the
3. The f ront desk staff should provide assistance in  Arrange calm and quiet corner with suitable asked for help guest’s language
f illing out the registration form and passport, visa and comfortable chair for the aged guests o Treat them with special care and  While dealing with the foreign language
details etc.  Always serve the elderly guests f irst with attention and deal with a soft and speaking guest, use distinct signs, sign
4. In some hotels, an in-room check-in and check-out great care and respect clear tone language, gestures or draw pictures
facilities are provided for such guests.  Ask for any special assistance or o Adjust yourself according to their Serving Single guests
5. Ask for the method of wake-up, pick-up of requirements pace  Arrange a comfortable seating
luggage, if help is required when the guest needs to  Treat guests on the basis of their pace  Provide them a comfortable and suitable arrangement with an interesting view
leave the room.  Deal with the guest in a clear, slow and seating arrangement and make the area as  Serve the guest with special attention
6. While check-in the receptionist calls the General calm voice functional  Offer newspaper or magazines
Manager or Resident manager and hand over the  Anticipate their needs concerning their  Anticipating their needs (e.g. wheelchairs,  Familiarize with the guest and
keys to the GM or RM, they will guide the guest to functional disabilities or required cutlery) and offer help for any approach with a f riendly behavior
the room.  difficulties request  Talk to the guest (if time allows and the
7. Depending on the guest, the General Manager  Escort the old guests to the washro o m and  Ensure there is enough space in the service guest is receptive)
will show all the facilities in the room, including the exit , if necessary area for them to move f reely Serving guests with health issues:
bathroom. Serving infant or young children:  Make the area as functional as you can  Identify whether the guest is allergic to any
8. The General Manager will emphasize to the guest  Always treat all infant or young guests as  Offer to help in taking their food, if food or not (e.g. seafood or nuts)
that he/she can call the reception anytime by using V.I.P guests required  Determine f rom the guest regarding
the phone (dial 9) or by pulling the cord or pressing  Deal with young guests with a playful  Escort them to the entry and exit any special dilatory needs
the switch in the bathroom. mind and special care  Do not take extra care of them too much  Before serving the guest, confirm whether
9. During the stay of a disabled guest, all  Be f riendly and familiarize with the so that they can think themselves aliens the guest has any serious health problems or
departments will do their utmost to make the stay as child  If the guest is visually impaired then offer not (e.g. heart patient or diabetic)
comfortable as possible.  Politely ask the parents to determine any necessary assistance such as:
special requirements, such as:
  Consult with the responsible chef and for products and services, attitudes to work, 5. Political influences - Most governments have, SWOT is the key technique for presenting the
supervisor before placing the order savings and investment, ecology, ethics, however, sought to construct policy over a number results of strategic analysis. It provides a
 Check to ensure the food is prepared etc.; of key areas of business activity. platform for going on to formulate the strateg y for
according to the requirement before serving  Demography the impact of the size and  control of inf lation (to improve the future.
it to the guest international competitiveness); The strengths and weaknesses should normally
structure of the population on the workforce
 Give assurance that all meals are prepared and patterns of demand;  promotion of economic growth and be based upon the internal analysis of the
concerning their health issues  Social structure - the impact of attitudes investment; organization whilst the opportunities and
Strategic Management to work and products and services.  control of unemployment; threats should be based upon an analysis of the
Chapter 4 2. Technological influences - Analysis of the  stabilization of exchange rates; organization's external environment
Analyzing the External Environment  control of balance of payments;
technological environment involves developing an
THE MACRO CONTEXT Factors which Factors which
understanding of the effects of changes in technology  control of monopoly power, both by
Macro Environment - The macro- help the prevent the
on all areas of a business and its activities, including: businesses and trade unions;
environment refers to the broad environment organization organization
 products and services;  provision of public and merit goods
outside an organization's industry and markets. achieve its f rom achieving
 operational processes; like health, education, defense, etc.;
Analysis of the macro-environment is more objectives its objectives
 information and communications;  control of pollution and environmental
difficult than internal analysis since it involves  transport and distribution; and protection;
everything that occurs outside the  society, politics, and economics.  redistribution of incomes (to varying Intemal
organization. 3. Economic influences - When the effects of f degrees); factors under the
Conducting macro-environmental analysis iscal and monetary pressure work themselves out in THE MICRO CONTEXT control of
Ginter and Duncan (1990) macro- the economy, they can affect any or all of the MICRO-ENVIRONMENT The micro (or near) managers or
environmental analysis involves: following economic factors: environment is that which immediately surrounds underlying
 Scanning macro-environments for  economic growth rates a business, the parts of which the business interacts resources
warning signs and possible environmental  levels of income in the economy; with f requently and over which it may have some inf
changes that will affect the organization;  levels of productivity (i.e. output per worker External factors
luence.
 Monitoring environments for specific For most purposes we can identify outside the
in the economy);
trends and patterns; Forecasting future  wage levels and the rate of increase in competitors, suppliers and customers as control of
directions of environmental changes, and wages; levels of inf lation (i.e. the year- comprising the main constituents of this layer of managers
 Assessing current and future trends in Opportunities
to-year rise in prices); the environment.
terms of the effects such changes would  levels of unemployment; Industry Analysis - This aims to establish the
have on the organization.  balance of payments (a measure of the nature of the competition in the industry and the
Technique for analyzing the macro- international competitiveness of one competitive position of the business. CHAPTER 5
environment (STEEP analysis) country's economy against its international Porter (1985) developed a f ramework for analyzing
 Social competitor countries); and the nature and extent of competition within an STRATEGIC SELECTION
 Technological  exchange rates (the exchange value industry.
 Economic Strategic selection is concerned with:
of one currency against another) PORTER'S FIVE FORCES MODEL OF
 Environmental 4. Environmental influences - The inf luence 1. Formulation of strategic options;
INDUSTRY ANALYSIS
 Political. of concerns for the physical environment (bo th the 2. Evaluating the availableoptions;
 The threat of new entrants to the
1. Socio-demographic inf luences Analysis of the natural environment and the built industry; 3. Selecting the options most likely to lead
social environment will require consideration of: environment) on THE organizations. Sustainable  The threat of substitute products; to strategicsuccess.
 Social culture (values, attitudes, development - development  The power of buyers or customers; • The
and beliefs) - the impact on demand which meets the needs of current generations power of suppliers (to businesses in the Strategy Formulation
without compromising the ability of future industry); and Understanding the underlying bases that guide
generations to meet their own needs.  Rivalry among businesses in the industry. future strategy, generating strategic options for
SWOT Analysis evaluation and selecting the best
options among them.-Johnson , Scholes, and Nondurable goods - are consumer goods that  Psychological Satisfactions – the seller's exclusive rights to use the brand name or
Whittington, 2008 are quickly consumed, worn-out, or outdated. enhancement of self -esteem, status, and brand mark.
In formulating strategy managers must consider • According to Type of end-user or the security. Examples; CEBU PACIFIC, DIAMOND HOTEL
the wider external environmental factors purpose for which the product is to be PRODUCT LINE PHILIPPINES , SKYJET AIRLINES, CROWN
affecting organizations operating in the industry or used: A product line is a group of products that are PROMENADE HOTEL, PHILIPPINE AIRLINES
parts of it. Consumer goods are goods that are bought by fairly closely related. It is a broad group of products, Blanket Family Name
The ‘big questions’ that are considered in household consumers for their own f inal intended for essentially similar uses and having Blanket Family refers to the use of the same
strategic selection usually concern three major consumption similar physical characteristics. brand name for all products. This strategy offers
areas: Industrial goods - are goods bought by a PRODUCT MIX certain advantages such as the development cost
1. Competitive strategy – how can advantage business for resale, for further processing, or for The set of all product lines offered for sale is less because there is no need for name
over competitors be achieved? use in producing other products, You sent THREE by the company is called product mix. research or heavy advertising expenditures to
2. Strategic directions – which products or LEVELS OF PRODUCT PRODUCT MIX STRATEGIES create brand name recognition.
services should be developed and in which Product planners think about the product on 1. Product Positioning Product positioning is a Selecting a Brand Name
markets should they be sold? three levels. The most basic is the core product, marketing strategy that helps place a product Some companies follow brand name
3. Strategic methods – what methods of which answers the question: What is the buyer perceptually in the minds of consumers. Positioning selection process through its Product
development should be adopted? really buying?. Marketers must uncover the needs typically requires creating differences between your Management Group, by carefully reviewing
Screening of hiding under every product and sell benefits not products or services and your competitors' offerings the product and its benefits, the target market and
Decision is made as to whether it is worth continuing but can be extended to your own products if they are proposed marketing mix strategy, then screening
features. The core product stands at the
with the further stages of evaluatio n or if certain marketed under different brands. hundreds of potential brand names suggested f
center of the total product as in the Three
options should be disregarded at this stage of • Positioning Strategies: rom various sources, and selecting the best one
Levels of Product
evaluation owing to their unsuitability. a) On specific product attribute based on consumers' reactions You sent and the
Kotler says that the product manager has to
Conclusion b) On the needs, they f ill or the advice of company marketing people and through
turn the core product into a tangible product,
Strategic selection is the process of choosing benefits they offer the services of advertising and research agencies
which may have as many characteristics as features,
the most appropriate strategies and tactics c) According to usage occasions and outside brand new consultants.
styling, brand name, packaging, and quality level.
to achieve the company's goals and objectives. d) For certain classes of users These are among the desirable qualities
Finally, the product planners may
Might involve deciding which products to develop, offer additional services and benefits that make e) Directly against a competitor f ) for a brand name:
which markets to enter, or which marketing channels Away f rom competitors
up an augmented product, by looking at the buyers' 1. It should closely suggest something
to use. total consumption system. g) Combination of Positioning about the product's benefits and qualities that the
The hospitality product can be defined strategies intended markets could associate with easily
MARKETING 2. Brand or Generic Name Decisions 2. It should be easy to pronounce,
as the set of satisfactions and dissatisfaction
Chapter 5: PRODUCT MIX A brand is a name, term, sign, symbol,
which a customer receives f rom a hospitality recognize, and remember.
WHAT IS A PRODUCT?
experience. The satisfactions may be physiological, design, or combination of these, intended to identify 3. It should be distinctive to readily
A product is anything that can be offered to a market econo mic, social, or psychological, as follows: the goods or services of one seller or group of arrest attention.
for attention, acquisition, use or consumption that  Physiological Satisfactions - full sellers and to differentiate them f rom those 4. Adaptable to new products that may be
might satisfy and delight a need or want of the added to the product line.
stomach, quenched thirst, comfortable bed, competitors.
target clientele. It is a set of tangible and intangible A brand name is the part of a brand 5. Capable of being registered and legally
warm and subdued environment.
attributes, including packaging, color, price, quality, that can be vocalized. It is the verbal part of the
 Economic Satisfactions - good value protected
and brand, plus the seller's services and reputation. brand.
for money, rapid service, convenient
➤ CLASSIFICATION OF PRODUCTS: location, and credit facilities. A brand mark is the part of the brand Protecting a Brand Name
• According to Durability:  Social Satisfactions - enjoyable that appears in the form of a symbol, design, Sometimes, brands become so well-
Durable goods - are consumer goods that are used company, attentive service, and sound distinctive coloring, or lettering. It is recognized by accepted that the brand name is
over an extended period of time. advice on food and wines. sight but cannot be uttered or vocalized.
A trademark is a brand or part of a brand
that is given legal protection. It protects
 substituted for the generic name of the product. very important role in the status of a hotel. An Variable costs change directly with
CHAPTER 6: PRICE MIX
To prevent the loss of the distinctive character unhygienic hotel will never be able to attract a lot changes in quantity or volume of production. Thus,
What is PRICE?
of the brand name and avoid its falling into a of people, especially if it has to attract a lo t of variable cost is usually on a per-unit basis
A price is the amount of money charged
generic name, three strategies could be used. people f rom foreign countries where the hygiene Total Cost refers to the sum of a
for a product or service. More broadly price is the
 Ensure the words "trademark" of conditions are top-notch. sum of the values consumers exchange for the company's f ixed costs and variable costs under a
the letters "TM" appear adjacent to Room Service: When people go to hotels, given level of production. What are the
benefits of having or using the product or service.
the brand name. they would expect good and prompt room service. GOALS OF PRICING?
Price is also defined in many ways as follows:
 Use two names; the company's This means, when they order food or ask for any  To maximize current profits.
 the values placed on goods and services
name together with the brand name service, a hotel that provides it promptly will have  To maintain or improve the target share of
 the amount of money and/or goods needed
of the brand name together with a great edge over the other hotels. the market.
to acquire some combination of another
the generic name. Price: The price of the rooms should be good and its accompanying services;  To pre-empt or minimize entry of
 Incorporating into the brand name such that both the rich and the middle-class people competition in the specified market segment.
 the value expressed in terms of pesos or
a distinctive signature or a logo. can afford them. Not everyone can afford a very any other monetary medium of exchange.  To survive in business sue to increased
3. Packaging expensive room and also not everyone will like to
What are the factors influencing price? overhead costs, excess capacity, stif f
The packaging is a marketing activity of stay in a room that does not have some luxurious
Several factors primarily determine the competition, and changing consumer needs
creatively designing and producing the appropriate facilities.
price of a product as follows: and wants.
container or wrapper for a product suitable to target Etiquettes: The people who come in
A. The Market for the Product  To attain the highest quality product in the
markets relative to competitor's products. contact with the customers, that is, the reception
1. Market Appeal market.
The primary package is the product's people, room service people, and waiters, all have to
immediate container. You sent 2. Market characteristics  To keep the loyalty and support of resellers
be trained well to behave in a manner that pleases the or to avoid government intervention.
The secondary package is the packaging 3. Elasticity of Market Demand
customer. They should be civilized, cultured, and PRICING STRATEGIES
material that protects the primary package and that is 4. Expandability of Market Demand
polite.
5. Pattern of Income Distribution New Product Pricing Strategies
thrown away when the product is about to be used by Food and Wine: The food should be of
B. Costs of the Product Generally, a company of fering a new
the target consumer. good quality and should be prepared in hygienic
Costs and price are f requently used product has two pricing options: to set a high price or
The shipping package is used primarily conditions.
interchangeably. It must be noted, however, that to set a low price. The strategy of setting a high
to store, identify, and ship the product to target Product Life Cycle
price and cost are two different terms. Cost refers price for a company's products backed up by a
markets. 1. Introductory Stage - at this stage, the product
to the amount of money spent in producing goods or strong promotional effort is called market skimming
The packaging is a highly important and is launched full-scale into the market. It is a period
services. Price, on the other hand, refers to the pricing. Under this approach, the company initially
valuable marketing tool for products. of very low sales performance during the f irst few
amount of money for which the same products or sets high prices to skim revenues layer by layer f
• Purposes of Packaging: months to one year or more.
services are offered to buyers. Price is simply cost rom the market. On the other hand, the strategy of
 For safety and utilitarian 2. Growth Stage - if the product earns market
plus a mark-up. setting a low price for a company's products also
purposes acceptance, it should at some point enter a period of FORMULA; backed up by strong promotional sup p o rt is called
 For the company's marketing comparatively rapid growth. COST + MARK UP = PRICE market penetration pricing. Under this approach, the
program 3. Maturity Stage - as the product approaches the company initially sets a low price to penetrate the
Types of Cost
 For increased profit and sales end of its growth period, sales begin to decline. This The company has two types of costs: f ixed and market quickly and deeply, that is, to attract a large
volume is to be expected as competing f irms try to variable costs. number of buyers and capture a large market share in
4. Other Image-Building Features operate within a slow-growth market. the process.
Fixed costs are costs that do not change
Hotel has to provide some additional features 4. Decline Stage - the decline stage is even if the quantity or volume of production changes.  Selling a high-quality product at a high price
like: characterized by falling sales and falling profits. These costs are also called overhead costs. is called the premium pricing strategy.
Hygiene: It comes next to the basic Most competitors have withdrawn f ro m the market.
function of accommodation. Hygiene plays a Survivor f irms compete within an even smaller
market, driving profit margins lower still.
  Selling a high-quality product at a low price  Optional-product pricing. This approach the world. In this approach, the company sets different types of customers. While "open market" prices
is called a good value pricing strategy. offers to sell optional or accessory products prices depending upon the region, state, or country should be subject to a rate parity strategy, prices
 Selling a low-quality product at a high price along with the main product. where the company sells its products. for corporate segments could be lower, especially if
is called the overcharging pricing strategy.  Captive-product pricing. Instead of offering PRICING STRATEGIES TO INCREASE they commit to a certain number of rooms or a
 Selling a low-quality product at a low price accessories to the main product, captive- product HOTEL REVENUE certain number of meals. Another option would be to
is called the economy pricing strategy. pricing would offer products that are essential 1. Pricing Strategy Based on Forecasting sell multiple rooms to travel agents for a lower rate,
Cost-Based Pricing Strategies to the main product itself. By-product pricing. The single most important pricing strategy so the travel agent can include the rooms in
Cost-Plus Pricing. This is the simplest  A by-product is a surplus product or item for hotels to master is the use of forecasting to set packages.
pricing method that requires a standard markup in coming f rom the main product itself. their prices based on anticipated demand. Essentially, 4. Discount Codes to Stimulate Direct
the cost of a product. This approach is also called this should mean that the hotel room rate is charged Bookings
 Product-bundle pricing. In this pricing
markup pricing. After determining the cost of the will depend on how high the demand is. For instance, Although a price parity strategy may prohibit
technique, a company combines several of its
product, a company simply sets a price by adding a times of high demand may lead to higher room rates, some of the pricing incentives that can stimulate
products into a bundle and offers the bundle for
standard markup to the cost. to maximize revenue. Tourism and Hospitality direct bookings, one highly effective strategy involves
sale at a reduced price.
Price = Cost + Markup (100%+Markup) Marketing A robust forecasting strategy relies upon the use of discount codes to encourage future direct
PRICE-ADJUSTMENT STRATEGIES
= 100% + Markup Discount pricing - this pricing strategy allows a accurate records being kept, with historical data - bookings. So, when a guest visits your hotel or
Break-even Price. company to reduce prices to reward customers for such as occupancy, revenue, room rates, and average property after booking through a third party, you
Under break-even pricing, the selling price certain responses like paying promptly or promoting spend per room - proving particularly useful. Also, it could offer them a discount code for any future
enables the company to break even. Break-even the company's products or services. is important to make use of data that is already in the direct bookings they make with you. This has the
refers to a condition where the company neither earns Following are some common forms of discount books, such as reservations, as well as any wider dual benefit of encouraging repeat business and
profit nor incurs a loss. In short, it is a point where market trends. encouraging them to book directly if they opt to
pricing:
net income is nil. Target Profit Pricing.  Cash discounts 2. Rate Parity Strategy stay in your hotel again in the future.
This pricing approach is a variation of break-  Quantity discounts In simple terms, a rate parity strategy 5. Offer a Package
even pricing. Under this scheme, the company sets a  Seasonal discounts involves maintaining consistent rates for the same Another solid option for those in hotel
target profit to be earned and uses break- even  Segmented pricing product, across all online distribution channels. The management attempting to maximize revenue is to
analysis to meet the said target.  Customer-segment pricing key benefit of this is that it provides transparency for create packages, allowing customers to pay for
FORMULA; consumers, while it is also often a prerequisite of more than just a room. Additional items, services,
 Product-form pricing
 Location pricing advertising rooms through online travel agents, or products that may feature in a package deal
 Time pricing such as You sent Expedia and [Link]. The include meals, bicycles, access to golf courses and
Value-Based Pricing primary challenge of this is the fact that OTAs charge equipment, and so on. With packages, the actual
Psychological Pricing - this pricing strategy looks
Value-based pricing considers the buyer's commission, and paying this while charging a low room rate may be lower than the equivalent rate
not only into the economics of pricing but also at the
perception of value as the main ingredient in pricing. rate can eat into the revenue you would have for an identical room on its own. However, your hotel
psychology of pricing. This approach relates to the
In a value-based approach, the starting point is the earned through direct bookings. However, direct will be able to sell more products at the same time.
effect of pricing on people's minds and determines
customer's perception of value, not cost. bookings can be stimulated in ways aside f rom 6. Length of Stay Strategy (LOS)
consumer reaction to the price set by the company for
Product-Mix Pricing Strategies simple room rate adjustments, as we will cover later As the name implies, a length of stay
its products.
 Product line pricing. This is a pricing in this article. strategy is based on adjusting pricing based on the
Promotional Pricing - sometimes a company
approach applicable to f irms that develop 3. Price Per Segment length of the stay. In some instances, such as when
decides to price some of its items below the regular
product lines rather than single products. One of the most commonly used pricing strategies for demand outweighs supply, it can be beneficial to
list price, or at times even below cost, to attract
those in the hotel industry is the price per segment, implement a rule where guests are 'obligated to stay
customer traffic. Macro comes up with items sold at
and this is where you offer the same product at a minimum number of days. In such cases, lower
very low prices to attract buyers to the store.
different prices to different rates may not always be necessary. On the other
Geographical Pricing - this pricing strategy is
hand, when demand is lower, you can
used by companies operating in different areas of
the country or different countries of
potentially encourage guests to stay longer by offering 10. Excellent Review Management
them a lower rate if they stay for multiple days, Finally, better reviews are likely to result
resulting in fewer unused rooms overall. in improved conversion rates. Meanwhile, guests
7. Cancellation Policy are also usually willing to spend more on rooms in
The cancellation policy of a hotel can also hotels with positive reviews, because they can have
factor in a pricing strategy and help to increase greater confidence in their choice. Indeed, when two
revenue. For instance, one option is to charge a hotels offer a similar product, the one with superior
lower rate the condition that a guest cannot reviews will often be chosen by customers. For this
receive a refund if they cancel the room, while reason, to maximize revenue, it is important to have
higher rates are charged when guests have greater f a comprehensive review management strategy in
lexibility with cancellations. This can be of place. This will likely mean striving to deliver an
particular value in hotels with high demand. By excellent customer experience, encouraging guests
charging lower rates, in exchange for no refunds, to leave reviews, and responding swiftly and
busy hotels can benefit f rom effectively being able competently to reviews and feedback posted on social
to sell the same room twice in the event of a media
cancellation.
8. Upselling
The basic principle of upselling involves
encouraging customers to spend more on their
existing purchase or booking, and it is a vital
component of any effective hotel revenue
management strategy within the hotel industry. It
may mean encouraging a guest to upgrade to a better
room, or pay a higher room rate for a more desirable
view. It could also mean persuading them to pay mo
re for a king-size bed. Upselling is often most
successful during the booking process, so it can be
beneficial to promote upgrade options while guests
are making their choices.
9. Cross-Selling
Cross-selling is a similar concept to
upselling, but rather than encouraging customers to
spend more on an existing purchase, it involves
encouraging customers to make additional purchases
on top of the one(s) already made. Within the
hotel industry, this will typically refer to additional
services, such as local tours, massages, or gym
services. Generally, cross-selling is most effective
after the initial booking has been made, but before
the guest actually arrives. For this reason, it is
often best achieved through promotional emails.