Case Study 1 Avari Hotel
NAME: KRISTIJAN MITIC ID: 10058
TITLE: AVARI RAMADA HOTEL: PRICING HOTEL ROOMS
COURSE: PRICING POLICY
INSTRUCTOR: IRENA NIKOLOVSKA
DUE DATE: 22 DECEMBER 2014
Avari Ramada Hotel: Pricing Hotel Rooms
BACKGROUND
Five-star hotel affiliated with the Ramada Renaissance hotel chain.
Located in Lahore, the capital of the Punjab province in Pakistan.
Established in 1978 by Byram Avari as part of the Hilton hotel chain.
Independently operating since 1987.
ROOM RATES AND PRICING POLICY
Avari priced its rooms on the basis of competition and demand. The rates at Avari were revised and adjusted twice a year according to the inflation rate. Avari’s policy is not turning away any guest so they have set different types of rates such as:
Individual rates - include rack rate (for frequent individual travelers), commercial rate (for those having no account but good reputed) and preferential rate (lowest rate). Ordinary guests were not aware of this division of rates.
Contract rates - include Executive business class rate (30% below rack rate), volume executive business class rate (40% below rack rate) and special rates (45% to 65% below rack rate) which had a bad impact on the hotel contribution margin.
Garbage rates - include diplomats rate (50% discount of rack rate), net wholesale rate (below than EBS but higher than VEBS), journalist rate (20% discount), airline rate (55% off) and IATA rate (50% discount).
CLIENTELE
Business clients – 61% of the hotel’s business, most profitable customers to serve. Constantly growing client segment.
Individual walking guests (frequent individual travelers) - seasonal client segment, decreasing significantly during the summer.
Tour groups – seasonal visits during the winter and spring due to extreme temperatures in the summer.
Other clients – non seasonal guests, including airline crews, government officials and journalists.
SUITES
Junior suite – 3300 Rupees.
Executive suite – 5500 Rupees.
Presidential suite – 7150 Rupees.
TITLE: AVARI RAMADA HOTEL: PRICING HOTEL ROOMS
COURSE: PRICING POLICY
INSTRUCTOR: IRENA NIKOLOVSKA
DUE DATE: 22 DECEMBER 2014
Avari Ramada Hotel: Pricing Hotel Rooms
BACKGROUND
Five-star hotel affiliated with the Ramada Renaissance hotel chain.
Located in Lahore, the capital of the Punjab province in Pakistan.
Established in 1978 by Byram Avari as part of the Hilton hotel chain.
Independently operating since 1987.
ROOM RATES AND PRICING POLICY
Avari priced its rooms on the basis of competition and demand. The rates at Avari were revised and adjusted twice a year according to the inflation rate. Avari’s policy is not turning away any guest so they have set different types of rates such as:
Individual rates - include rack rate (for frequent individual travelers), commercial rate (for those having no account but good reputed) and preferential rate (lowest rate). Ordinary guests were not aware of this division of rates.
Contract rates - include Executive business class rate (30% below rack rate), volume executive business class rate (40% below rack rate) and special rates (45% to 65% below rack rate) which had a bad impact on the hotel contribution margin.
Garbage rates - include diplomats rate (50% discount of rack rate), net wholesale rate (below than EBS but higher than VEBS), journalist rate (20% discount), airline rate (55% off) and IATA rate (50% discount).
CLIENTELE
Business clients – 61% of the hotel’s business, most profitable customers to serve. Constantly growing client segment.
Individual walking guests (frequent individual travelers) - seasonal client segment, decreasing significantly during the summer.
Tour groups – seasonal visits during the winter and spring due to extreme temperatures in the summer.
Other clients – non seasonal guests, including airline crews, government officials and journalists.
SUITES
Junior suite – 3300 Rupees.
Executive suite – 5500 Rupees.
Presidential suite – 7150 Rupees.