The hospitality industry has always been something that fascinated me. First, I really enjoy working with people and consider myself quite social. Second, when I think about my career, I imagine something to do with providing people with unforgettable experiences. I believe that owning a hotel is a great way to do so, which I can then branch out to include multiple hotels in the region and maybe even the nation. My philosophy is simple: people should be able to travel with comfort and experience new places to the fullest, which can only be achieved if they stay somewhere they feel cozy and taken care of.
The purpose of this paper is to present a business I would like to open someday by first analyzing the competition to understand the supply and demand of my potential venture in detail. When starting a company, it is crucial to use various resources. I will rely on business intelligence on my competitors from their official web-sites and web-pages of Hotels.com and similar services. In addition, when starting a business, I would use various government-issued sources to understand all the applicable legal implications, as well as credible statistical industry- and area-specific reports to grasp what it means to operate a hotel in Jacksonville, Alabama.
In terms of the hospitality industry, Jacksonville is far from having a dense network of hotels or restaurants. My small town has a population of a couple of thousands, which makes it not likely to be attractive to tourists. Despite that, the area is full of some great hotels, some of which I am going to compare to one another in terms of price and its associated factors. Figure 1 demonstrates that out of the 10 hotels chosen for analysis, Springwood Inn charged the most, with an average price per room per night being around $400, according to Kayak (2021). It is evident that almost all the other options, which could be found in Jacksonville and the closest surrounding areas, are priced relatively the same. The prices for 8 out of the 10 hotels presented range from $108 (Sleep Inn Oxford Anniston I-20) to $157 (Hampton Inn & Suites Oxford-Anniston) (Kayak, 2021). Moreover, the only hotel with a low price compared to all the others is University Inn with an average room price of $67 (Kayak, 2021). It is important to mention that the prices disclosed on the Kayak web-site are subject to fluctuation due to the changes in seasons and certain holidays. Thus, the prices presented in Figure 1 are reflective only of the month of April 2021.
Figure 1. Jacksonville and surrounding areas: Hotel price range (Kayak, 2021).
As for the factors influencing the pricing, the most expensive hotel offers the guests some perks. One of them is a convenient yet picturesque location between Anniston and Oxford with Mountain Longleaf National Wildlife Refuge nearby. Another one is the fact that the hotel is awarded 5 stars and can offer the visitors the entirety of special services, accommodation, and quality guest experience, all of which come with that. As for the least expensive hotel, it is rather small and the design of the rooms is not as modern. Moreover, University Inn is located right on the outskirts of Jacksonville and the surrounding area is nothing special. When discussing the price range of the hotels in Figure 1, it is imperative to recognize that the cheaper the hotels were, the harder it was to find available rooms in them. This is the phenomenon known as the demand curve, which refers to the concept of demand rising as the price lowers (Taylor, 2014).
Although the research shows a range of prices, it is important to note higher prices usually reflect customer satisfaction rates and advertising spending. The hotels are generally priced higher if they have a lot of reviews, a substantial rating to make it to the top of the Kayak list, as well as pronounced online presence, which includes a web-site and social media marketing efforts.
As a business owner, it is crucial to know how sensitive potential or existing customers might react to price changes, which is why it is important to establish the elasticity of demand for accommodation in Jacksonville. Stengel (2012) defines elasticity of demand as “the ratio of the percentage change in demand to the percentage change in a determinant factor, such as price (3.6 Elasticity of demand, para. 3). The research demonstrates that the demand for hotels in Jacksonville and surrounding areas is definitely elastic. The most expensive hotel has no reviews, while the least expensive one has plenty. If the price is too high, guests are going to find a cheaper alternative. For the hotel industry, the demand is affected by a price or income changes, which, in fact, makes it elastic (Stengel, 2012). However, it is also apparent that the most popular hotels in the area are priced a bit higher than the cheapest one. This means that as long as the guests have the means to pay for a little extra comfort and supplementary services, they will.
References
Kayak. (2021). Jacksonville hotels. Web.
Stengel, D. (2012). Managerial economics principles. Flat World Education. Web.
Taylor, T. (2014) Principles of microeconomics. OpenStax College. Web.