Meditations and Learnings

Meditations and Learnings

When Luxury Hotel Rooms Are Cheaper Than the Budget Hotel Down the Road

With an unutilised capacity, a luxury hotel often lowers prices on the unaccommodated rooms. After all, an empty unit earns no money, while a discounted room still generates some profit. If the prices are suitably attractive, tourists will book all the rooms in an economy hotel next to a high-end hotel with excess capacity. To sell its rooms, the typically expensive hotel engages in cost-cutting to entice prospective tourists/travellers.