Oct 2, 2020 in Analysis

Hotel Absurd Case Study
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Summary of the Case

The case investigates a scenario, whereby the resort fee is higher than the price of the reserved room. The case illustrates how unethical the hospitality industry has become. Furthermore, it indicates the ethical issues that tend to happen in hotels due to unethical behavior and charging resort fee that has not been previously involved in the advertisement of the hotel.

 

Resort fee refers to the hotel amenities mandatory purchase. These hotel amenities include parking, using the pool, using the internet, and using landline phones among many others. Often, the hotels do not take into consideration, whether these hotel amenities are used by their customers or not, but they are required to pay for everything.  Additionally, many hotels use the resort fee to hide the actual price of the hotel rooms generally because of the free market’s realistic pressure. The travel writer narrates his ordeal when decides to find a hotel, whose room costs less than the resort fee.

He, therefore, used Kayak, Agoda and a thorough article that talked about Las Vegas excessive resort fee to find the property under consideration. The writer identified five more hotels, the rooms of which cost less than the resort fee. Thus, he decides to make a reservation in one hotel he refers to as hotel A. While searching for hotel A, he used a booking engine that is a third party. However, the booking engine failed to include the resort fee in the calculation of total price of the hotel. This is clearly unethical, as certain hotels use booking engines that are third party to advertise wrong costs, which are lower than the costs their competitors offer. In hotel A, he realizes that the hotel forces its guests to use the internet and a landline telephone with a total cost that is higher as compared to what was advertised.

Moreover, another ethical issue the hospitality industry engages is that hotels fail to mention in their advertisements that the resort fee is taxed by the various states. The same refers to the case with hotel A in Las Vegas, which fails to mention that the resort fee will involve taxation by the Nevada State. Therefore, the travel writer explains to the management of hotel A how the resort fee has become deceptive. He explains this using photo links, screen grabs, and saved websites. He tells them how the hotels fail to disclose the resort fee properly, which deceives their guests.

 
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The hotels also act unethically by using websites in the advertisement of hotels with images that are technically false. For instance, hotels use flourishing images, which are not always the case; besides, they advertise free hotel amenities, such as local calls and Wi-Fi. However, the advertised free hotel amenities ironically become free if only they have been paid for. Thus, the travel writer refused to pay the resort fee, arguing that it was not included in his booking as far as the booking conditions were concerned. This did not work for him as the hotel management cancelled his reservation even after he explained to them that the resort fee was not logical.

Conclusively, hotels unethically impose resort fee to their guests. They use resort fee to avoid economics of free markets in room advertisement rates. Hotels also use resort fee to lure their guests into something they did not intend to get, using false cheaper prices.

The Effect the Case has on the Market

The case of the resort fee being higher than the resort price has various impacts on the markets. Firstly, it affects the hotel credibility. The case gives various instances, whereby hotels unethically give false information concerning them. They present false images and information about their hotel amenities and conditions, such as free calls and Wi-Fi. More importantly, the varying costs negatively impact the market of the hotel. When guests visit these hotels with a view of getting cheaper prices with the free mentioned conditions, they are generally disappointed, when encounter higher prices with hotel amenities that they are supposed to pay for. Therefore, the clients question the credibility of the hotel as it provides wrong information in its advertisement. Questioning the credibility of the hotel destroys its reputation and it may take long to earn it again, therefore making many guests to avoid the hotel.

Furthermore, this case also lowers the marketability of the competitors’ hotels. When hotels use cheaper prices to advertise themselves, guests tend to be more affiliated to them as compared to other hotels. This is because everyone wants to be accommodated in a hotel that offers services and good conditions that are affordable. Consequently, the competitors’ hotels fail to receive guests due to the perceived higher prices when it comes to the hotel services. These competitors’ hotels, therefore, lack market as they are overpowered by the cheap marketability of other hotels, which tend to offer “cheaper prices” as compared to them.

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Additionally, when the resort fee is higher than the reserved room price, the hotels can experience erratic markets. These unpredictable markets are created, when the guests expect cheaper prices but fail to get them and encounter higher prices. They leave these hotels and try to find a realistic cheaper one. Therefore, the marketability of the hotel becomes unpredictable, as it is not mandatory that the marketed hotel with false information concerning it will be preferred by many guests. Some guests may choose to stay and pay the higher prices, while some may opt to leave and find hotels with cheaper prices. These guests may, in turn, inform other guests, who may start boycotting the hotels mentioned in the case. 

The case may also create uneven profits in the market. They may be caused by the dropping in stock prices. Investors may fail to buy shares from the hotels, which act unethically in providing information concerning their services and conditions. This is because putting investments in dishonest hotel firms leads to poor returns. Unethical issues also make employees with ethical standards to report the procedures practiced in the hotel to law enforcers. Due to the employees reporting of the ethical issues, the public image of the hotel is destroyed. Moreover, legal actions against the hotel may take a long period of time as intensive research on the ethical issues has to be conducted and the findings reported to the required federal agents. The case hearings may also take a long period of time and the functioning of the hotel may be stopped for a given period of time, therefore leading to uneven profits in hotels mentioned in the case.

Presentation (When Your Resort Fee Costs More than Your Room)

Occasionally, while visiting different hotels, one will encounter various ethical issues. This presentation focuses on the ethical issues in a scenario, whereby the resort fee is higher than the price of a hotel room. In this scenario, there are various unethical procedures conducted by hotel managements to ensure that the resort fee costs more that the cost of the room.

To begin with, they fail to include the resort fee, while advertising the hotel. Therefore, when a guest identifies the hotel, he will quickly make a conclusion that the hotel has cheaper prices and thus, opt it. He will eventually encounter that resort fee is higher than the cost of the reserved room. For clarification purposes, resort fees are mandatory costs that guests are required to pay for various hotel amenities, such as hotel parking and swimming pools among others.

Hotels also act unethically by using images for advertisement that generally create a false impression. Besides, hotels boost their marketability by offering lower costs than what their competitors do in the advertisements. However, it is of great disappointment, when guests visit such hotels only to pay resort fee for services that they are not interested in. For instance, a guest is required to pay for parking, even if he does not own a car. This, in turn, makes a guest pay a higher resort cost as compared to the cost of his/her reserved room.

Hotels also act unethically by using the resort fee imposed on their guests, therefore, luring them into what they did not intent to get, using cheaper prices when advertising the hotels. Thus, they use resort fee to evade the markets economy as far as room advertisement is concerned at the expense of their guests.

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