Pearson New International Edition International pcl tp indd 1

Impact on Pricing
Pricing decisions naturally follow the development of room occupancy or availabili-
ty forecasts. Until recently, surprising little was written about the complexity of hotel
room pricing. Most of the literature focused on the pros and cons of a variety of for-
mulas developed to establish initial room rates. Whether based on building costs,
amenities offered, operating expenses, room size, or other factors, the development of
the hotel’s initial (target) ADR is important. What is vastly more important, how-
ever, is the need to manage the hotel’s room rate in a manner that maximizes RevPar,
or GoPar as some hoteliers have recently advocated.