ROOMS MANAGEMENT

Room Pricing

A rate that is assigned to the product (room) of an organization (hotel) according to the elasticity of
demand and supply is done through the process of Room pricing, which is decided upon the level of
services provided, costs involved in the upkeep of the rooms, revenue targets along with market
share of the organisation, loyalty and paying capacity of guests. (M. Collins & Parsa, 2006) Room
pricing is one of the major components of hospitality marketing mix that lays the basis of revenue
generation of the organization which helps in gaining advantage over competitors. (Cross, Higbie &
Cross, 2009; et al.)It can be understood as a key element of Revenue management that assists
managers to sell rooms according to best possible rates and allotments that enables them to
constitute maximum possible revenue for the organisation. (N. El-Gayar, A.T. Hendawi, et al., 2008).
Room Pricing is namely influenced by three elements : 1) Environmental Element, in the form of
setting and opposition from hotels in the vicinity; 2) Substantial Element, in the form of quality
services received in physiological form.3) Characteristic element, in the form of feedbacks and
reviews by guests. Room pricing is done as a result of the intermix of these elements which is
decided according to the preferences of consumers. (G. Viglia, 2016). For instance, the ‘Empathy
Suite’ of ‘The Palms Casino Resort’ is the highest priced rooms at $100,000 per night, in the world
because of its location – Las Vegas, Features i.e., two story villa which comprises two luxurious
master bedrooms, bar which has thirteen seating capacity along with six standalone Hirst art
instalments. ( M. Perino, Business Insider US)

Customer Satisfaction

In order to ensure an active pace in the competitive market arena, it is essential to comprehend the
customer satisfaction in accordance with their expectations. expectations. (Farris, Paul W.; Neil T.
Bendle; Phillip,E. Pfeifer; David J. Reibstein, 2010) Customer satisfaction is the outcome of the
variation amongst the concepts of actual presentation of services against the forecasted
expectations – which also portraits one of popular theories of expectancy-disconfirmation. (Gitman,
Lawrence J.; Carl D.McDaniel (2005)At moderate Room pricing, the effect of various factors that
affect customer satisfaction (i.e., hygiene and upkeep of room maintenance along with constant
commitment towards guest service,) wouldn’t be so significant. However in comparison to that at
high and low room pricing, the effect of those factors towards customer satisfaction would be quite
consequential. (Mattila & O'neill, 2003). In support of this, customer satisfaction can be understood
as the worth derived from an association, wherein the worth can be understood as the actual quality
of service received in contrast to the original expections of the guests with regards to price paid for
the services. (Homburg, Christian, Nicole Koschate, and Wayne D. Hoyer, 2006).Organizations
which are able to assess what exactly are the preferences of their customers (with regards to the
price paid), along with their dissatisfactions or grievances, tend to bring out better results when
compared to organizations which don’t follow the same ideal. (Barsky & Nash,2003). For an
instance, lately the startup brand “oyo” has been very evident for their expansion at global level.
They’re able to do so because their CEO Mr. Ritesh Aggarwal has a vision of making the chain
affordable, available along with notable customer experience that satisfies the guests in all spheres.
(ET Bureau)
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BIBLOGRAPHY

Barsky J., & Nash L. (2003). Customer satisfaction: Applying concepts to industry- wide measures. The Cornell Hotel and
Restaurant Administration Quarterly, 44 (4): 173-183.

Cross, R., Higbie, J. & Cross, D. (2009). Revenue management’s renaissance: a rebirth of the art and science of profitable
revenue generation. Cornell Hospitality Quarterly, 50(1), 56-8

Farris, Paul W.; Neil T. Bendle; Phillip E. Pfeifer; David J. Reibstein (2010). Marketing Metrics: The Definitive Guide to
Measuring Marketing Performance. Upper Saddle River, New Jersey: PearsonEducation, Inc.

Gitman, Lawrence J.; Carl D. McDaniel (2005). The Future of Business: The Essentials. Mason,Ohio: South-Western.

Graziano Abrate Giampaolo Viglia, Strategic and tactical price decisions in hotel revenue management,
Tourism Management Volume 55, August 2016, Pages 123-132

Homburg, Christian, Nicole Koschate, and Wayne D. Hoyer. "The role of cognition and affect in theformation of
customer satisfaction: a dynamic perspective." Journal of Marketing 70.3 (2006)

Mattila & O'neill, A & J.2003 'RELATIONSHIPS BETWEEN HOTEL ROOM PRICING, OCCUPANCY, AND
GUEST SATISFACTION: A LONGITUDINAL CASE OF A MIDSCALE HOTEL IN THE UNITED STATESTitle of article', Journal of
Hospitality & Tourism Research,  Vol. 27, No. 3, August 2003.

Michael Collin & H.G. Parsa, Pricing strategies to maximise revenues in the lodging industry, HOSPITALITY
MANAGEMENT 25 (2006) 91-107

N. El-Gayar, A.T. Hendawi, A. Zakhar, A. Zakhary, H. El – Shishiny, A proposed decision support model for hotel room
revenue management, ICGST Int J Artif Intell Mach Learn, 8 (1)(2008), pp. 23-28

Oh, H., & Parks, S. C. (1997). Customer satisfaction and service quality: A critical review of the literature and research
implications for the hospitality industry. Hospitality Research Journal, 20(3), 35-64.

https://www.businessinsider.co.za/most-expensive-hotel-room-damien-hirst-art-palms-las-vegas-empathy-suite-2019-3
(as accessed on 3rd October, 16:02hour)

https://economictimes.indiatimes.com/small-biz/startups/features/oyo-set-to-be-one-of-the-largest-hospitality-brands-
in-the-world-says-ceo-aditya-ghosh/articleshow/71236239.cms