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Economic analysis of hotel
The economics of the hotel industry
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Why might a profitable motel shut down in the long run if the land on which it is located becomes extremely valuable due to surrounding economic development?
A profitable motel might shut down in the long run because its land value has risen. If the opportunity cost of stay in business doesn’t outweigh the possible capital gain, then the owner or owners has to make a logical decision to shut down. In my opinion, it would be more profitable to shut down because then it would be possible to sell the property and earn a capital gain; instead of paying the increase taxes due to the surrounding economic development which increased the land value. Another reason for a motel to shutdown would be new development appeal, which buyers comes in to the
What is going to happen to Three Mile Island? Should it be shut down or should it remain open? I
people have been living there for a for a long time and he does not want the
will have to make sure that they get enough profit to be able to open
Since these were low income areas there wasn’t a high tax revenue to maintain the areas. This would cause in the infrastructures not being up to date or completely reliable. It is far to expensive to pay to renovate these areas and the issue also comes from who will pay for it. when there is a low income area that is heavily concentrated with people it becomes very difficult to upkeep that area which results in it becoming more and more rundown.
Because the hotel was designed by Mudgett and not by a professional architect, the construction of the building would be deemed unsafe by inspectors out of pure lack of architectural knowledge; the building would be found to have many hazards to the customers, both intentional and unintentional. His building would have needed to be inspected before it could be used for commercial purposes and would have had a very hard time passing the inspection, thus preventing or at the least delaying it’s opening. The inspectors of the building would have found gas lines running throughout the structure and would have adamantly rejected the commercial use of the building due to its odd safety hazards. Inspectors of the building would also be wary of the surgical tables in an office with no reason behind medical accommodations in a hotel, only deepening their suspicions and increasing the likelihood of disapproving of the building’s commercial use. As if that wasn’t enough to warrant concern; the dynamics of the vault would prove inadequate for glass making purposes, the claimed purpose behind the vault. By the end of the inspection, the building would have a number of safety issues that would have to be resolved before it could be opened and the inspection itself would likely result in contact with the police due to the abnormalities inside the
When the price of rent rises, which is a fixed costs of production, it will reduce profits. Furthermore, the business owner will consider whether it is still in the desired profit level. He will calculate the total revenue and total cost of his business. If the total revenue it would get less than its total costs, he would decide to exit the market. The same calculation is done by the company that will enter into the market. Given that the new community is formed lucrative target market for them, thus they decided to enter into the
value of that property to be much lower. Since the property was a dilapidated building in a bad
The reason for this may be because of increasing crime rates. The casinos would have everyone believe there is no change in crime statistics after they come in but this is not true. The American Insurance Institute estimates that 40% of all white collar crimes have their roots in gambling. Compulsive gamblers will bet until they have nothing left: savings, family assets, person...
-“Emphasis on individual property brands was not working from a number of fronts. Guests are seeking a unique Rosewood property experience and are not making the connection between Rosewood properties and are increasingly indentifying with other strong hotel brands.” –Scott and Boulogne
The first situation is that of “special events” such as holiday periods, sporting/political events, etc. These events throw more power in the relationship to industry players due to the large customer demand and constrained supply. For example hotels see huge demand around the World Cup sporting event and hotel prices as a result on average spike between 100-300% compared to normal levels and for the last World Cup prices in one city went even further north of around 583% (Mallén, 2013). On the flip side, periods of economic recession have the opposite affect by impacting demand negatively thus forcing hotels to greatly lower prices to spur demand or compete with other industry players. During the last US recession, the average hotel occupancy rate dropped to a record low of 45% at one point from the normal average of 63%. As a result of the greatly declining revenues, such as a 48% drop by Marriott International, industry players laid off over 400,000 employees and greatly scaled back costs and new developments. Also importantly to customers who now saw more power in the relationship drift to their side during this time period, the average daily room price dropped to $98.18 (2009) from the record high of $107.42 pre-recession (2008). Both effects on opposing fulcrums show how important customer demand can affect the industry and the players’ actions
Accor Hotels is a multinational hotel group which owns, operates and franchises over 3700 in 92 countries representing several different brand names. The brands they represent range from budget, economy to five star accommodation. This hotel group is classed as a large organisation, they call their Human Resource department Talent and Culture this department consists of managers and staff who 's main focus is the Human Resource Management roles and responsibility. The Human Resource role and responsibility within the Accor company is the human resource manager as it a large business, this department supports business and running of the business. The human resource manager is responsible for employee engagement, employee relations, recruitment and selection, health and safety and legislation.
The company Established in Hong Kong in 1963, Mandarin Oriental Hotel Group is. international hotel investment and management group operating ten hotels in the Asia-Pacific region. The company manages each of these. hotels and has significant ownership interests in all but Mandarin. Oriental, San Francisco and the Phuket Yacht Club Hotel and Beach.
...r – “By the end of the decade, there was a casino in-sight from every point in the city.” A record 15 million people visited Las Vegas in 1971, and an estimated 81% of those tourists gambled during their time in Vegas – an obvious effect of Hughes’ massive investments in casinos. By 1974, gaming revenue topped $1 billion, and just below 50% of Nevada’s state budget was supported by gaming taxes. Hughes was able to drastically increase the size and attraction of the city, making it more profitable, tourist friendly and glamorous. None of this would have been possible without the gaming industry to lure Hughes towards the city – once again gambling played a lead role in the growth of Las Vegas. The industry’s growth continued at a torrid pace, until the legalization of gambling in other states made the future of the city’s gaming industry murky.
Local business have been able to expand due to the massive amounts of tourists who come and sample local cuisine or check out local merchandise made by various natives
...ulnerable to market fluctuations that a prosperous steel plant providing locals with years of work can suddenly collapse. Abandoned plants are eyesores in the community which directly affect the value of land and homes.