The findings of the study indicate that the managers in Saudi Hotels pay attention to several criteria when development the pricing policies. In particular, they focus on the level of demand and the competition. For example, their prices can fluctuate depending on the changes in the number of visitors during a year. Nonetheless, there were some exceptions to this rule. Some business administrators paid attention such criteria as the cost of service and expected profitability. Nevertheless, these hoteliers were not in the majority. It should be noted that many respondents emphasized the impact of false information and unforeseen events. For example, one can mention the rumors about the epidemic of swine flu in the country. Furthermore, it is possible to mention the political unrest in various countries of the Middle East. These factors make hoteliers to change their pricing policies. It is not permissible to overlook these circumstances since they can profoundly influence the performance of a hotel. On the whole, the managers were aware of the fact that there is no perfect strategy for setting prices.
It should be taken into account that scholars also provide various recommendations about the most optimal pricing strategies. For example, one can speak about the so-called cost-plus model. It implies that managers should take into account the operational expenses of a hotel and its expected profitability (Pride & Ferrell 11). One can argue that this model was adopted by some of the business administrators interviewed during this study. Nevertheless, researchers can argue that this framework does not take into consideration the fluctuations in demand and supply (Pride & Ferrell 11). By relying on it, one can miss the opportunities for increasing the profitability of hotel. Furthermore, this strategy cannot help avoid losses. Furthermore, researchers pay attention to such a factor as competition. In their opinion, hotel managers should remember about such issues as the pricing policies of other hotels and the intensity of competition in the field. Finally, one should remember about such a concept as dynamic pricing. It implies that hoteliers should focus on the available market information such local events, competitors’ strategies, historical records, customer surveys or the data provided by travel agencies or airlines (Talluri and van Ryzin 25). This approach is beneficial since it ensures the flexibility of pricing policies and helps managers to retain clients (Talluri and van Ryzin 25). This is its major strength.
Overall, it is possible to say that the respondents are familiar with the recommendations offered by scholars. In some cases, they may not necessary use the concepts that researchers mention in their works. However, in most cases they are aware of the challenges discussed by scholars. For instance, they usually avoid pricing policies that are based only on organizational costs. Furthermore, they are not willing to enter price wars with other hotels. As a rule, these professionals are familiar with the practices adopted at other hotels. These are some of the main aspects that can be identified.
These cases suggest that hotel managers in Saudi Arabia attach great importance pricing policies. In their opinion, this aspect of yield management is critical for the profitability of a hotel. Furthermore, they apply different tools while doing their work. This approach is critical for the profitability of these hotels and their long-term sustainability.
Works Cited
Pride, William, & O. Ferrell. Foundations of Marketing, New York: Cengage Learning, 2011. Print.
Talluri, Kalyan, & G. van Ryzin. The Theory and Practice of Revenue Management, New York: Springer, 2005. Print.