Question

Peak demand for rooms at the Phoenician, an upscale hotel in Scottsdale, Arizona, occurs during the tourist season from November through mid-April. During the summerslow season when demand for rooms drops considerably, the Phoenician encourages local residents to experience the beauty of the hotel on weekends by offering attractively priced weekend packages. The Phoenician uses which of the following strategies for shifting demand to match capacity?

A. Differentiate on price
B. Modify timing and location of service delivery
C. Vary the service offering
D. Stretch capacity
E. Communicate with customers

Answer 1

A) Differentiate on price

Step-by-step explanation:

Differential pricing strategies involve charging different prices to different customers depending on their willingness and ability to pay. In this case, the hotel charges more during peak season because it has a lot of potential customers willing and able to pay high prices. But then when the demand falls, they will charge a much lower price to local residents since they are probably not willing to pay high prices. This way the hotel can still function during the rest of the year.