Tuesday, June 30, 2015

The Business Connections

My parents have owned a business for about more than half my life. I would always been there to help my parents at their store and it was a great way for me, as a child, to be exposed to business. As I grew up, I was really interested as well as involved in my parents business. The Hotel Management course is the investment I was offered to officially study in the business field. 

Today during the lecture I learned something that I knew I could bring back to my family. Its more of an understanding of how my parents us certain methods and aspects that make their business successful. For example, similar to how hotels "haggle" their prices, which is an approach to customers that lowers the price with different products offered, my parents do them same as well. To go in depth in a guest asked to book a room at the top floors with a view but thought the price was to high, the concierge could low the price if they offer another room that didn't have the room with a view. This is call the Top Down pricing approach. I instantly saw a connections with my parent's way of selling certain objects. This approach was similar to how my parents barter with the customers with different products. 
"I made sure to take notes! Oh wait... you didn't think these
were it did you? I got more, its a whole notebook worth!"
We also learned the physical and non-physical fences in the hotel industry. The fences are used in a way to discount certain products. For example a hotel will reject a on night stay for $70, but will offer the same room for $60 dollars if they stay for an extended time. This method of discounting is what my parent use often. Deals like "buying one is $7 but buying two is $10". In addition, we learned about variable costs and what would be the most profitable when opening and closing certain rates for rooms. Variable costs are the costs that account for when the guests use electricity or water. Mrs.McCarthy reminded us that the rate of any room should not be lower than the variable cost. This is like how my parent's store doesn't sell anything lower than the wholesale price. If it is lower than these costs there will be no profit made. 

What we learned today was based on discounts and it surprised me how the basic discounting on certain items can be compared to discounting in a hotel. Although we mainly focused on these discounting aspects in the lecture, I was interested to see what else I can make a connection with from a small business to a large one. I made so many connections between my parents store and the hotel business. I want to bring them back and show my parents that even though its a Hotel Management class there is so many aspects that are alike to businesses like my parents. I'm ready to make more connections as well as what things can make my parent's store better.

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