Supply,Demand, and Pricing - Internet Article ECO/360

Essay by sholman121University, Bachelor'sA+, November 2007

download word file, 4 pages 0.0

Internet Article summary supply, demand, and pricing of All-suite hotels a market economy can be defined as, "An economic system based on private property and the market in which, in principle, individuals decide how, what, and for whom to produce" (Colander, 2004, p. 54). Supply and demand have an important place in a market driven economy.

The article reviewed for this summary was "All-suite segment attractive to developers, travelers" was written by Jan Freitag, Hotel Motel Columnist and vice president of Smith Travel Research. The All-suite hotel segment in the United States is one service that remains attractive to both developers and travelers. In this article the phenomenon of all-suite hotels and their continued growth in an otherwise declining market is discussed. According to the author, the number of all-suite properties has continued to than the industry supply and has kept up this growth rate over the past eight years all-suite hotels have continued to outperform their more traditional competition.

"All-suite hotels currently make up some 12.5 percent of all available rooms" (Freitag, 2007, p. 16) and "the demand share is slightly higher at 13.8 percent" (p. 16).

As demand for the all-suites segment has increased so have developer interests which has resulted in an above average increase in supply of 3.5 percent through April of 2007 (p.16). Freitag also points to increases in average daily rates (ADR) above $100 per night and occupancy rates often exceeding 70 percent" (p.16) as indicators that these hotels are preferred by developers and travelers.

The author points out that initially all-suite hotel rooms were offered to the public at a rate lesser than traditional lodging. Over the past eight years the number of all-suite properties has continued to grow faster than the industry which has resulted in an overall industry occupancy rate...