HADM 1350 Study Guide - Final Guide: Aarp

• School: Cornell University
• Department: Hotel Administration
• Course: HADM 1350
• Professor: Reneta Mc Carthy

Document Summary

Top-down pricing approach - selling from top to down. Incremental room-nights - additional room nights that drops straight down to bottom line. Non-physical rate fences: customer characteristics: aaa, aarp, corp. rates. Capacity constrained service businesses (using demand-based pricing, dynamic pricing, differential pricing) Discounting decreases unrealized revenue potential and increase incremental revenue from rate sensitive guests. Appropriate price setting is a key component of yield management. Fences are logical, rational rules or restrictions that are designed to allow customers to segment themselves into appropriate rate categories based on their needs, behaviors and willingness to pay. Fences are used to prevent higher-rate customers from trading down to discounted rooms. Successful fences use a meaningful segmentation strategy that differentiates customers who are willing and able to pay increased prices from those who are willing to change their behavior in exchange for a lower price point.