Blog
The Economics of Hotel Deals
23rd September 2008
e-break deals from the likes of Marriott Hotels regularly end up in the junk-mail bin. But this advert prompted a lively classroom discussion….
Why do hotels charge less for rooms at weekends than during the week?
Why are the advertised room rates for Peterborough so much lower than for Swansea for what is likely to be a standardised hotel?
At current exchange rates, how do the advertised rates for Moscow, Bucharest and Warsaw compare with UK prices?
Why have locations such as Swindon, Leicester and Peterborough been chosen for the e-break deal?
Why was this email sent to me on a Tuesday?
Even for students a couple of weeks into their course, they had an instinctive understanding of the nature of price elasticity of demand for business and leisure consumers, the profit opportunities from slashing room rates but making this up from other hotel services, maximising the capacity of the hotel and the benefits of new customers being added to corporate databases.
Geoff Riley
Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.