Use supply and demand analysis to explain why hotel room rental rates near your campus during parents’ weekend and graduation weekend might differ from the rates charged during the rest of the year.
To analyze why hotel room rental rates near your campus might differ during parents' weekend and graduation weekend compared to the rest of the year, we can use the principles of supply and demand.
1. Demand:
During parents' weekend and graduation weekend, the demand for hotel rooms near your campus is likely to be higher than usual. Many parents and families of students will be visiting for these special occasions and require accommodation. The demand curve for hotel rooms during these weekends will shift to the right, indicating an increase in demand.
2. Supply:
The supply of hotel rooms near your campus is relatively fixed in the short term. The number of hotels and rooms available does not change significantly during these special weekends. Therefore, the supply curve for hotel rooms remains relatively unchanged.
3. Equilibrium Price:
When the demand for hotel rooms increases while the supply remains constant, it results in a shift in equilibrium. The equilibrium price refers to the price at which the quantity demanded equals the quantity supplied. In this case, the increase in demand during parents' weekend and graduation weekend will lead to an upward pressure on prices.
4. Increases in Rental Rates:
Due to the higher demand and limited supply during these special weekends, hotel owners and managers can take advantage of this situation by increasing their rental rates. By doing so, they maximize their revenue and profitability.
In summary, hotel room rental rates near your campus during parents' weekend and graduation weekend might differ from the rates charged during the rest of the year because of the higher demand and limited supply during these specific weekends. The principles of supply and demand indicate that when demand increases and supply remains constant, prices tend to rise.
Hotel room rental rates near your campus during parents' weekend and graduation weekend might differ from the rates charged during the rest of the year due to changes in supply and demand.
1. Increase in Demand: During parents' weekend and graduation weekend, there is typically a surge in demand for hotel rooms. Many visitors, including parents, relatives, and friends, travel to attend these events. The increased demand puts upward pressure on room rates.
2. Limited Supply: The supply of hotel rooms near your campus might be limited compared to the demand during these peak weekends. Since there are typically a fixed number of hotels and rooms available, the surge in demand cannot be met with an immediate increase in supply. As a result, hotels can charge higher rates due to the scarcity of available rooms.
3. Seasonal Demand: Parents' weekend and graduation weekend are specific events that occur once or twice a year. This makes the demand for hotel rooms during these periods somewhat seasonal. To maximize their profits, hotels might adjust their rates accordingly, charging higher prices during peak times when demand is high.
4. Price Elasticity: Hotel room demand during these weekends tends to be more price inelastic. This means that even if prices increase, visitors are still willing to pay the higher rates because they have limited alternative options or are unwilling to compromise proximity to the campus. Higher demand combined with less price sensitivity allows hotels to charge higher rates during these peak weekends.
In summary, hotel room rental rates near your campus during parents' weekend and graduation weekend might differ from the rates charged during the rest of the year due to increased demand, limited supply, seasonal demand, and price elasticity factors.