Future Business Leaders of America (FBLA) Hospitality Management Practice Test

Discount pricing is a strategy widely used by hotels during off-peak seasons to boost occupancy rates and attract more guests. This approach involves lowering room rates or offering special deals, such as packages that include meals or additional amenities, to entice travelers who might be price-sensitive or looking for bargains. By implementing discount pricing, hotels can increase their appeal to a broader audience, encouraging bookings that might not otherwise occur during slower periods.

This strategy also helps hotels maintain some level of revenue during times when demand is traditionally low, contributing to cash flow and preventing the property from being underutilized. Additionally, offering discounts can create positive experiences for guests, leading to repeat business and word-of-mouth referrals.

While other pricing strategies exist, such as penetration pricing, which focuses on gaining market share with low initial prices, or dynamic pricing, which adjusts prices in real-time based on demand, discount pricing specifically targets the off-peak season to effectively fill rooms and attract guests. Value-based pricing, on the other hand, emphasizes setting prices based on perceived value rather than simply lowering prices, which may not be as effective in achieving the goal of increased occupancy during slow periods.