Which of the following statements is TRUE?
A) Price points are rare if not non-existent in the hospitality industry.
B) Today, yield management is used by everyone.
C) Excess capacity is a good reason to cut prices.
D) Business travelers are usually more price-sensitive than pleasure travelers.

Question

Quizplus · Accepted Answer

Excess capacity refers to a situation where the demand for a product or service is lower than its supply. In such a scenario, businesses often resort to price cuts to attract customers and increase sales. Hence, option C is true.

Option A is false because price points, or specific price levels for a product or service, are commonly used in the hospitality industry.

Option B is also false because while yield management is a popular practice in the hospitality and travel industries, not all businesses use it.

Option D is false because business travelers are generally less price-sensitive than leisure travelers since their expenses are often covered by their employers.

Which of the Following Statements Is TRUE