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    Tropical Paradise Resort: Price Services

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    The Tropical Paradise Resort is located on the coast of an exotic island in the Pacific Ocean. The room rates are $300 a night. If you have a room, you also have free access to the pool, gym and tennis courts.

    The resort offers also the following services:

    - aerobics classes ($5 per class)
    - therapeutic massages ($40 per massage)
    - scuba diving trips to a nearby coral reef ($60 per trip)
    - day trips to the volcano that is located on the island ($100 per trip)

    The average visitor stays for 5 days. The hotel is considering two pricing options: The first is to charge the regular room rate and then charge each visitor for any of the additional services separately. The other is to provide a package where a higher room rate would allow free access not only to the pool, gym and tennis courts, but also to the aerobics, massage, diving, and volcano trips. The objective of the resort is to maximize the long term profits by attracting repeat as well as new customers.

    Should they price their services separately or bundle them in a single price? Why?

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    Solution Preview

    My first question is, why should they choose between the two? The ability to offer the consumer both options would seem more viable. Cruises have charged separate prices for many services that are not shipbound, but the ships offer a lot of free services as well.

    The average consumer wants value and quality for their money. A consumer that is not interested in much more than a stress free vacation would probably like at least a ...

    Solution Summary

    This solution provides assistance with pricing services for Tropical Paradise Resort.