Case ID: M314     Solution ID: 16731     Words: 1499 Price $ 75

Avari Ramada Hotel Pricing Hotel Rooms Case Solution

Case Solution

In December 1988, Mr. TahirRazaMian, executive manager of sales and marketing at the Avari Lahore Ramada Renaissance Hotel (Avari), was worried about the normal room rate at the inn. Surprisingly since operations started in Lahore, Avari's normal room rate had fallen beneath that of its principle rival, Pearl Continental Hotel. Tahir felt that he expected to re-assess Avari's present valuing arrangement to build up an arrangement to cure the circumstance before the start of the New Year.

Excel Calculations

·         Occupancy Rate                               

·         Profit Margin    

·         Increase In Occupancy  

·         Increase In Rates

·         Clientele

·         Frequent Individual Traveler (FIT)

·         Executive Business Service (EBS)

·         Volume Executive Business Service (VEBS)

·         Tour

·         Special

·         Summer Package

·         Conventions

·         Airline

·         Other

·         Note

·         Total Rooms

Questions Covered

Should Raza seek to increase the occupancy rate or average room rate? What are trade-offs? What factors should he consider?

Consideration of factors

1: Seasonality Effect

2: Type of Rooms

3: Revenue Generation Services

4: Demand Forecasts

Trade-offs for Price Increase

Pricing Recommendation

5.       What other metrics could / should Raza use to evaluate the performance of his pricing structure? Why?