ABSTRACT
This chapter discusses various approaches to pricing and shows the various methods of setting room rates. It explains the methods of pricing Food and Beverage products. The chapter introduces the concepts of Menu Engineering and the concept of Revenue Management. Pricing is challenging due to service nature of industry and interactions between the guests and servers that lead to different experiences even if service delivery was exactly the same. Forecasting the demand in the hotel industry can be related to the flow of customers into a restaurant or a hotel and their demand. Objective pricing methods based upon data in the approved operating budget help the manager transfer budget plans into selling prices. Revenue management is considered by most hospitality operations as both a business philosophy and a process oriented approach crucial to their ability to increase revenues and maximize profits.
