Pricing in the hotel and catering sector

A cost-markup model for the retail sector provides the starting point for developing a model to explain the gross margins in the hotel and catering sectors. The model treats average percentage gross margin as the sum of the average percentage operating costs less labor and a markup. The markup consi...

Full description

Saved in:
Bibliographic Details
Published in:De Economist (Netherlands) 1987-01, Vol.135 (2), p.201-218
Main Authors: Van der Hoeven, W. H. M., Thurik, A. R.
Format: Article
Language:English
Subjects:
Catering
Costs
Economic models
Economic theory
Gross margins
Hotels & motels
Mathematical analysis
Pricing
Pricing policies
Restaurants
Service industry
Studies
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:A cost-markup model for the retail sector provides the starting point for developing a model to explain the gross margins in the hotel and catering sectors. The model treats average percentage gross margin as the sum of the average percentage operating costs less labor and a markup. The markup consists of 4 parts: 1. a minimal average reward for labor, 2. the influence of the nature of the product/service package, 3. the development of the market share, and 4. the growth of consumer spending. Dutch data for the period 1977-1981 are used to estimate the model empirically, with establishments divided into 3 types: 1. restaurants, lunchrooms, cafeterias, and snackbars, 2. cafes, bars, dance halls, and nightclubs, and 3. hotels. The enterprises are grouped by type of trade per year according to sales volume. The results indicate that the hypothesis of markup pricing in the hotel and catering sector must be rejected, but the model may be useful in studying influence on price-setting.
ISSN:0013-063X
1572-9982
DOI:10.1007/BF01718262