Discussion 10 – Maximizing your pricing…how ethical is that given certain circumstances?

Why this discussion?

As the last discussion, rethink the goal of revenue management: maximizing your revenues and profits. This case study directly addresses the ethics related to the common lodging industry practice of increasing room rates in response to significant increases in buyer demand. As will be true in most cases in which ethical dilemmas will be presented to you, your own recognition of the issues in play are more important than class agreement about what is, or what is not, ethical behavior. Now rethink this from what you’ve learned in the ethics portion of this chapter or at JMU and from what are your ethical principles. It also reminds me of a few issues:

• London RevPAR was the highest on the 7 July 2016 attacks on the city’s transit system terrorist day when people could not go back home but dropped 15% in the subsequent months.
  
•  The JMU Eight Key Questions (8KQ) to evaluate the ethical dimensions of a situation
• Have you read this article ”

  Haircuts-PriceFix  ? It might help you to better understand the consequences of price changes and to fully answer this case study questions.

Case Study

“This blizzard is incredible,” said Shaniqua, the desk clerk on duty at the Quality Suites located at exit 15 on Interstate 96. “Our phone hasn’t stopped ringing for the past 30 minutes.”

“How many rooms do we still have left to sell?” asked Tara, the Front Desk supervisor on duty.

“45 rooms and 3 suites,” replied Shaniqua.

“And what rate are you quoting?” asked Tara.

“Rack, just like you told me. But I think you could double that and we would still sell out! The Interstate will be closed down within an hour, and this lobby will be packed with folks wanting rooms.”

Questions:

1. If you were Tara, would you increase the room rates at your hotel above the normal “rack” rate? How much? (1.5 points)

2. Are there ethical issues in play in this scenario? Explain your answer. (1.5 points)

3. How would Tara know if there are state or local laws that could directly affect the room rate decision she is about to make? (1.5 points)

Tasks and Assessment Criteria

You are invited to do the following:

• 1. Read this case study above, its questions and understand what are those JMU 8KQ
     
  2. Read and reflect on the article thinking about the JMU 8KQ issues: Fairness, Outcomes, Responsibilities, Character, Liberty, Empathy, Authority, and Rights. Then post your answers to each question. Your answers to the above-mentioned questions, critique the case study situation, and highlight something that you have learned from your class (slides) notes, reflecting also on how it relates to the other knowledge that you have learned so far in your major.
  3. Answer the questions (1.5 points each)
  4. It is possible that answers will vary and will likely present rational personal arguments which take into consideration the context aligned with your ethical principles and your learning; once you have created your post, respond to at least one of your classmates. See if others would have the same or different approach as you. (1 point)