Introduction: Avari Lahore Ramada Renaissance Hotel, a hotel reflecting the
traditional hospitality of Lahore combined with five star standards. It was situated
down the beautiful tree-lined Shahrah-e-Quid-e-Azam overlooking the zoological
Gardens and conveniently adjacent to the Provincial Assembly and commercial
zones of Lahore.
2. Competitor Analysis
Being one of the only two 5 star hotels in Lahore, Avari Ramada faced a taut and
direct competition with Pearl Continental Hotel. Pearl was situated one kilometre from
Avari so it was essentially in the same neighbourhood adjacent to Governors‟ house
and near beautiful Jinnah Gardens. Pearl had similar pricing policies as those at
Avari, with the same rate structure and reassessment policies. However, the room
rates of Pearl had always been marginally lower than Avari’s. November 1988 was
the first time the room prices of Pearl had overtaken the prices of it competitor. The
summer package of Peal in 1988 was a greater success than Avari’s. This was
believed to be due to people‟s predilection of Pearls fresher look with bigger rooms
and widespread lawns.
3. Marketing Recommendations
Brand Building
One of the major weaknesses of Avari Ramada hotel was the lack of Brand Image in
the minds of the consumers. This can also be categorised as an opportunity if the
management is able to build a differentiating and distinct brand image for
itself. Create the Brand “Avari”, so when a potential customer thought of Lahore they
thought of Avari. Initially at the nascent stage of brand building Avari should harp
Service as their “Unique Selling Proposition (USP)”.
Leveraging its weakness
Avari can make its background and history a selling proposition in the second stage
of marketing.
With the deep routed tradition and culture of Pakistan, it can differentiate itself from
Pearl, an experiential boutique hotel offering more than just stay. It can leverage its
smaller sized property to Pearl by calling it a hotel with a more intimate setting. This
strategy will provide Avari and edge over Pearl, especially for leisure travellers who
will be coming to Pakistan to feel the country’s essence.
4. Questions
Q1 ) Should Raza seek to increase the occupancy rate or average room rate? What are the
trade-offs? What factors should he consider? Avari Ramada Hotel: Pricing
Hotel Rooms
The management at Avari seemed fine at not gaining the summer package share as
long as their 80% occupancy target for the year was achieved. This was not the right
approach; since they were already giving discounts and promotions to the guests it
will be in the best interest of Avari to make these rates competitive to those of
Increasing the Occupancy Rate
Along with having competition and demand pricing approach, Avari Ramada should
concentrate on profit oriented approach. The hotel’s main focus at this point in time should
be to increase the occupancy rate. Out of 11 months in 1988, occupancy for 8 months had
been higher for Pearl. Avari should concentrate on increasing not just occupancy solely, but
Profitable occupancy. In the month of November 45% occupancy was with individuals

That is a colossal percentage seeing that the special rate has an adverse affect on the revenue.carrying 45 to 60% discount as per the Special rates. 3. This is not only going to help the hotel increase its revenue but also help it to tap into the entire inert consumer surplus. Summer Packages: Promotions are one of the most crucial tools used to increase the occupancy of a hotel. The emulous gain on summer package will be even more crucial. To attract more of Frequent Individual Travellers and Executive Business Service clients the hotel should do some sort of sophisticated pricing strategies like bundling. Utilizing additional sources of revenue: More than 50% of the hotel revenue was from sales other than those of rooms. Avari should peruse strategies on increasing this untapped source of revenue. The main focus of Avari management should not be restricted to the room revenue but should expand towards these additional amenities. Their average room rate for the months of May. once the flights from Europe and United States with the influx of leisure travellers coming to Pakistan during summer. as a brand with not only unparallel service but also a deep routed cultural heritage. For all the Contract and Garbage rates the hotel should provide the basic room type with an option of upgrading by paying a little extra amount. This can be done by combining two services like room stay and dinner together. The hotel can charge a little higher price than the room rent for this service but still keep the prices lower. Room Differentiation: At this point of time Avari Ramada hotel has various pricing strategies for different clientele. Beverage (from restaurants and room service) and other miscellaneous sales like spa. June and July was almost Rs 89 higher than Pearl’s. they need to follow a more competitive pricing strategy to gain market share. they were not able to successfully outdo their competitor. starting from basic. Pearl’s promotion. 4. It should be positioned. deluxe to superior. One of the strategies would be to limit the number of rooms given in Special Rates for corporate and to try and increase the influx of Executive Business service Clients.Food. Bundling The hotel can package two or more products together to gain a pricing advantage. Pricing Recommendations 1. by promoting the facilities to the incoming guests as well as potential customers. gymnasium etc. They should classify the rooms. It should be segmented in the right manner as per our recommendations for it to help in inviting more guests and increasing its occupancy. The distinguishing factors can arise by providing increasing amenities as you go along in ascending order. if taken either of them of them separately. Even though Avari was aggressively providing various different deals with the summer package. Conclusion: Avari Ramada has an opportunity to build its brand image in the minds of potential customers‟ and the management should steer their marketing strategies towards the attainment of this goal. . these sales included . Q2) What other metrics could /should Raza use to evaluate the performance of his pricing structure? Why? The pricing strategy should be simplified by classifying the rates by not only client type but room type as well. Since Avari will not be able to change their infrastructure to compare it to Pearls spacious rooms and extensive lawns. in the minds of the customers. 2.