Factors Affecting Consumer Demands

Topics: Hotel, Hospitality industry, Lodging Pages: 6 (1898 words) Published: March 1, 2013
Page Section 1 - Introduction 3
Section 2 - Evaluate main factors affecting consumer demands & types of hospitality products
2.1 Seasonality 4 - 5
2.2 Price 6 - 7
2.3 Location 8 - 9
2.4 Contemporary issue 10 - 11
Section 3 - Conclusion 12
Section 4 - References 13 - 14
Appendix 1 & 2 15


In the highly changeable hospitality world, there are different types of hospitality products which are based on different consumer needs and demands. Besides, any hospitality company must identify clearly about the factors which are affecting the needs and demands of consumer. After that, they can offer different types of products to fulfil consumers and make profit.


2.1 Seasonality

According to Butler (1994), “seasonality is a temporal imbalance in the phenomenon of tourism”. Seasonality affects the number of tourists, their willing to spend and demands. If company is looking for more profit, understanding consumers’ needs is an essential procedure. However, it may be a positive or negative impact for any hospitality company. For positive impact, it can receive more cash at peak season to cover the fixed cost for the entire year. Using the occupancy rate for hotel industry compare between peak season and low season as an example, based on the research statistics of hotel room occupancy report from Hong Kong Tourism Board, there is around 10% higher hotel occupancy rate than low season compared with peak season. (Appendix 1) On the other hand, for negative impact, it is hard to manage well for any hospitality company because of instable condition. It needs to recruit some part-time employees to serve the abrupt change of consumers at peak season. However, providing consistent service to consumer is extremely important to meet their expectation and generate experience which is differed to the other competitors according to the service delivery framework (SDF). The occurrence of seasonality period and frequency may affected by weather. There are different consumer demands for different weather situations. According to K.Blazejczyk (2007), “weather is a factor that influences the possibility of outdoor recreation and tourism”. In summer, consumers may look for the facilities to enjoy sand and sea, such as Sanya in Mainland China and Male in Maldives. In winter, consumers may look for the facilities to enjoy ski and spa, such as Helsinki in Finland and Stockholm in Sweden. Using Maldives as an example, although the average temperature for the entire year is around 27-29°C, there is an obvious difference for the rainy days per month. (Appendix 2) Based on the statistics, from January to April and from May to December are the peak season and low season to travel Maldives respectively. Therefore, consumers may demand for different destinations and hospitality products when there are different seasons.

2.2 Price

“Buyers are more price sensitive when the expense accounts for a large percentage of buyers’ available income or budget.” According to Thomas Nagle and Reed Holden book (The strategy and Tactics of Pricing). That means why hospitality company must understand consumers’ expectation for the future. This expectation is not only include their desired hospitality products’ quality, but also hospitality products’ price too. If the product selling price is higher than consumers’ budget, they would not spend money on it. It is because hospitality industry is one of the most competitive industries. There are a thousand of competitors to compare lots of things by consumer, including price. For any industry, there is a price differentiation. That means there are different prices from the same provider. In hospitality industry,...

References: * Hagmann, J, Connolly, M., Ficarelli, P., Ramaru, J.(2002). The service delivery framework, from http://www.picoteam.org/pdf1/SDF2.pdf
* Rene T
* Stephan Weidner (2006). Seasonality in tourism: A review of seasonality of hotel accomodation in New Zealand. Retrieved from: http://www.hausarbeiten.de/faecher/vorschau/122991.html
* K
* Nagle, Thomas and Holden, Reed. (2002). The Strategy and Tactics of Pricing. Prentice Hall. (pp. 84-104).
* Terri Zwierzynski (2005). Differentiation -- Smart Marketing Strategies for the Solo Entrepreneur. Retrieved from: http://www.powerhomebiz.com/vol150/differentiation.htm
* The Hotels Association of Zhejiang Province (2005)
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