Tropical Paradise Resort: Price Services
Not what you're looking for?
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?
Purchase this Solution
Solution Summary
This solution provides assistance with pricing services for Tropical Paradise Resort.
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 ...
Purchase this Solution
Free BrainMass Quizzes
Understanding Management
This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.
Situational Leadership
This quiz will help you better understand Situational Leadership and its theories.
Organizational Behavior (OB)
The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce
Production and cost theory
Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.