HTM 18100 Chapter Notes - Chapter 1: Sales Promotion, Empty Nest Syndrome

• School: Purdue University
• Department: Hospitality and Tourism Management
• Course: HTM 18100
• Professor: Susan Gordan

Document Summary

No need for hotels as travel was limited. Very limited travel by traders and officials. Early beginnings of hotel industry with roadside inns. Development of bigger and better hotels start. Travel for both business and pleasure is routine. Development of sophisticated hotel industry worldwide to cater to travelers. At midnight, value of unsold inventory is sh. Cannot move or deliver to high demand areas. Today only 50 are sold, revenue is lost. Tomorrow, super bowl in town, but i can only sell 100 rooms! No way to make up lost revenue. No way to increase production to meet increase demand. Cost per room is ,000 to million. Even at low/no occupancy we incur fixed costs. Variable costs per occupied room are low. Cost of cleaning, replacing linen, utilities used, etc. Need to make or exceed break even point. High profits, once we exceed break-even point. Business fluctuates from winter to spring to summer to fall in most hotels.