HTM 2030 Chapter Notes -Loss Leader

• School: University of Guelph
• Department: Hospitality and Tourism Management
• Course: HTM 2030
• Professor: Connie Zavitz

Document Summary

Menu pricing is determining the price to charge your guests for the items you sell. Menu pricing is both an art and a science. The science is calculating the selling price based on what it costs to produce the item. The art is setting the price at the appropriate level to provide your guests with good value and the operation with good revenue and net income. First, you can use subjective methods where the manager selects the price but has little or no basis on which to justify that price. However, if you use this approach, you need to be aware of how your operation is similar or different from the competitors. Finally, you can use costs as the basis for setting the menu price. Reasonable cost method - the manager assumes they know what a guest is willing to pay and sets the price accordingly.