Pearson New International Edition International pcl tp indd 1

Discussion Questions:
1. Do you agree with the observation that it is frequently difficult to increase occu-
pancy rates by reducing the room rate? Why or why not? What additional tac-
tics can a revenue manager use to sell rooms on dates when there will likely be
many vacant rooms?
2. The chapter presents two examples of times when RevPar data can look favor-
able relative to past periods but have no financial benefit for the property. Can
you think of other examples of ways that RevPar data can be manipulated in
ways detrimental to the hotel?
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loaf has been increased. Would you buy the bread? Would you return to this
store in the future?
•
You want to attend a concert by your favorite, internationally known musical
group. You want front-row seats and are told that, because only a few remain,
they will cost twice as much as a seats several rows back. Would you purchase
the better seats?
•
You would like to rent a guestroom near Times Square in Manhattan on New
Year’s Eve so that you can easily join the crowds celebrating the New Year. The
reservations agent says that, because demand for these rooms is heavy, available
rooms on that date have been assigned a special event rate and will cost twice
as much as normal. Would you book the room?
In each of these cases, the consumer-business interaction is affected by strong
demand, a supply shortage, or both. The airline industry is commonly recognized as
the first business to actively manage (vary) pricing in response to strong changes in
consumer demand. Airline officials have perfected techniques to increase ticket prices
when demand is heavy and to maximize revenue by lowering prices when they antic-
ipate fewer tickets will be sold. As a result, passengers on the same flight often pay
different fares. Some of the variance relates to service levels (first class, business class,
or coach), some is the result of timing of ticket purchase (e.g., 21-day advance or
same-day purchase), and some is due to the number of tickets purchased by whole-
salers, business and leisure travelers, and others. Not surprisingly, rental car agencies