Factors Affecting Price Determination in Tourism and Hospitality Industry

Determining Price in Tourism and Hospitality

• The most important factor in determining the price of a product in the tourism and hospitality industry is demand.

Law of Demand

• The law of demand states that as the price of a product increases, the demand for it decreases.

Price Determination Factors

• The seller considers the cost of production when determining the price of a product.
• The price range of a product depends on the cost of production, market conditions, and competition.

Competitive Pricing

• The pricing strategies of other businesses in the market (competitors) affect price determination.

Benchmark Pricing

• The benchmark for setting the price of a product in the tourism and hospitality industry is the market price.

Law of Demand and Price

• The law of demand states that as the price of a product increases, the demand for it decreases, and vice versa.

Upper Price Limit

• The upper limit of the price range of a product is determined by the maximum amount customers are willing to pay.

Competitive Pricing Strategies

• Considering the pricing strategies of other businesses in the market affects price determination.

Buyer's Concern

• The buyer's primary concern when determining the price of a product is the value they receive for their money.