Bus 4645 Week 3 Individual Assignment
Middlesex University Dubai
MBA Module 4643 Financial Management and Economics
Individual Assignment
Toni Munns
Student ID: M00383523
February 2012
Module Leader: Dr Rajesh Mohnot
Word Count:
The following essay provides input to the marketing strategy for the first half of 2012 for The McKenzie Hotel Group’s newest hotel. This luxury 5 Star property located on the Palm Jumeirah, Dubai, United Arab Emirates. The input provided will cover consideration of the service on offer, target markets, cost analysis, supply and demand effects, market structure, pricing strategies, the impact of recession and consideration of currency effects. Through analysis and comparison with economic theories, recommendations will be made to guide the marketing …show more content…
I have observed from my previous experience within the hotel market in Dubai that in similar conditions a 33% reduction in room rates results in a doubling of demand suggesting a relatively high price elasticity of demand (-3). This suggests that in the demand luxury hotel market in Dubai is sensitive to room rates. The income elasticity of demand for such a service in Dubai is likely to be relatively high given its status as a luxury item, given the global nature of the market it is complexed to access how the individual income effects for each feeder market. There are cross elasticities that will have an impact on demand, key factors to consider is the cost of air travel to the U.A.E. Since such a high proportion of hotel room occupants arrive by air there is likely to be a high cross priced elasticity between demand for hotel rooms and the price of air travel. Looking ahead to the first half of 2012, effects on aviation travel may include oil price variations and …show more content…
Costs are all incurred in U.A.E. Dirhams so the main impact on currencies is on sales. Since the U.A.E Dirham and GCC currencies are pegged to the U.S. Dollar there is no consideration required for the domestic market in respect to currency fluctuations. However some currency fluctuations may have a major impact on sales in the first half of 2012. The Eurozone crisis may result in a reduction in the value of the Euro against the Dollar (and hence the UAE Dirham) which will make luxury hotel accommodation in Dubai relatively more expensive for customers in the Eurozone market. As well as the cost of rooms from The McKenzie Group Hotel, customers will also be affected by the relative increase in costs for anything bought locally, such as food and entertainment. This risk further confirms that the European is not a good prospect for sales for the first half of
MBA Module 4643 Financial Management and Economics
Individual Assignment
Toni Munns
Student ID: M00383523
February 2012
Module Leader: Dr Rajesh Mohnot
Word Count:
The following essay provides input to the marketing strategy for the first half of 2012 for The McKenzie Hotel Group’s newest hotel. This luxury 5 Star property located on the Palm Jumeirah, Dubai, United Arab Emirates. The input provided will cover consideration of the service on offer, target markets, cost analysis, supply and demand effects, market structure, pricing strategies, the impact of recession and consideration of currency effects. Through analysis and comparison with economic theories, recommendations will be made to guide the marketing …show more content…
I have observed from my previous experience within the hotel market in Dubai that in similar conditions a 33% reduction in room rates results in a doubling of demand suggesting a relatively high price elasticity of demand (-3). This suggests that in the demand luxury hotel market in Dubai is sensitive to room rates. The income elasticity of demand for such a service in Dubai is likely to be relatively high given its status as a luxury item, given the global nature of the market it is complexed to access how the individual income effects for each feeder market. There are cross elasticities that will have an impact on demand, key factors to consider is the cost of air travel to the U.A.E. Since such a high proportion of hotel room occupants arrive by air there is likely to be a high cross priced elasticity between demand for hotel rooms and the price of air travel. Looking ahead to the first half of 2012, effects on aviation travel may include oil price variations and …show more content…
Costs are all incurred in U.A.E. Dirhams so the main impact on currencies is on sales. Since the U.A.E Dirham and GCC currencies are pegged to the U.S. Dollar there is no consideration required for the domestic market in respect to currency fluctuations. However some currency fluctuations may have a major impact on sales in the first half of 2012. The Eurozone crisis may result in a reduction in the value of the Euro against the Dollar (and hence the UAE Dirham) which will make luxury hotel accommodation in Dubai relatively more expensive for customers in the Eurozone market. As well as the cost of rooms from The McKenzie Group Hotel, customers will also be affected by the relative increase in costs for anything bought locally, such as food and entertainment. This risk further confirms that the European is not a good prospect for sales for the first half of