What's going at Blue Angel?

[Mike]

He also helps hotel owners change, explore and take advantage of changes to the market place or find new ways to increase their profitability in their existing market or expand upon what they already do well.

 

[cvchief]

The owner pays whether they sell rooms are not. Where the owner gets the funds falls on the owner. The more rooms sold, the more current electricity is used, so the more is due and ideally that would come from room payments. What difference does it make? Future room costs will be tied to the market, not old expenses to be paid.

So, owners have unlimited funds and all they have to do is meet the market? I am pretty sure if the owner can't raise the rates and can't lower expenses, they should sell out of that death spiral.

On the other hand, it seems many hotels exist in Coz and charge many different rates, so I doubt BA is maxed out on what they can charge.

---------- Post added November 10th, 2013 at 11:22 PM ----------

He also helps hotel owners change, explore and take advantage of changes to the market place or find new ways to increase their profitability in their existing market or expand upon what they already do well.

You mean like doing stuff to be able to raise rates and cover expenses?

 

[DandyDon]

So, owners have unlimited funds and all they have to do is meet the market? I am pretty sure if the owner can't raise the rates and can't lower expenses, they should sell out of that death spiral.

On the other hand, it seems many hotels exist in Coz and charge many different rates, so I doubt BA is maxed out on what they can charge.

What are you drinking? You are doing a poor job of reading what I said as well as restating it in totally different meaning.

It's really simple. Try reading this out loud: Hotels will charge as much as they think they can get, or as little as they have to in order to sale. Whether there are profits, much less sufficient profits to meet needs, varies. Most hotels continue to operate year to year, some sell - as the BA has several times I've seen, and some just close.

I'm confident that Eva will succeed in spite of challenges. Rates will be as high as possible or low as needed regardless of this new issue.

 

[cvchief]

Great so now we agree, any business needs to raise enough revenue to meet expenses. I was just confused on the 'cant raise rates' and 'find the money somewhere else' thing. Glad you came around....

 

[Mike]

You mean like doing stuff to be able to raise rates and cover expenses?

Yep.

Try reading this out loud: Hotels will charge as much as they think they can get, or as little as they have to in order to sale.

Not really. A hotel room or a hotel with diving is a product and the product's value and price are determined by the market, not by what a hotel owner determines is the price they want to sell their product for.

A product with a low perceived value in the market cannot sell for a top of the market price for example, no matter how much the owner needs the money.

Every product in the market seeks a particular buyer. If your product is designed to appeal to an economy minded buyer you've got no where to go but lower your prices by cutting your expenses or increase your percieved value and attract a different slice of the market, a buyer who will spend more and allow you to have other profit sources. It's very difficult for a product to appeal to too large a slice of the buyers in a market as very cheap (affordability) minded customers simply won't pay more for a better product they will abandon the product that increases in perceived value in the market and seek another product with less value because they are buying at a price point, not a value point.

What I'm getting at is if the BA's isn't able to cut expenses somewhere else, they simply cannot lower prices to sell more rooms to 'buy themselves' out of a hole. They will have to look at a different market position, possibly increasing value and abandoning the economy model for the service model and attract a different customer who makes it easier to be profitable. Economy is the worst place to be in a market, because at some point you can only cut expenses so much until you start devaluing your product. All it takes is to have multiple outside uncontrolalble expenses such as increases in taxes, local fees, higher utilities, wages, etc.. to destroy a business that was just surviving on what was a razor thin existance on a tight margin. Your economy minded customers will abandon you in a heartbeat to the next low priced competitor if you increase your rates no matter what you do to enhance your product.

 

[DandyDon]

Great so now we agree, any business needs to raise enough revenue to meet expenses. I was just confused on the 'cant raise rates' and 'find the money somewhere else' thing. Glad you came around....

Which I never said. Your imaginative reading.

Not really. A hotel room or a hotel with diving is a product and the product's value and price are determined by the market, not by what a hotel owner determines is the price they want to sell their product for.

That is what I said.

Having a government owned oil company, a government owned electric company, and government taxes with centuries old government traditions of taking as much as they can short of ruining business is going to squeeze the businesses and increase costs to visitors as much as they think they can get away with. The politicians keep talking about reform, then going back to old ways - but it's their country.

The Yucatan peninsula is not very valuable to the federal government without tourism, but they milk that for all they can. "January 23, 1970, Isla Cancún had only three residents, caretakers of the coconut plantation of Don José de Jesús Lima Gutiérrez, who lived on Isla Mujeres, and there were only 117 people living in nearby Puerto Juarez, a fishing village and military base." The feds have been making the most of developments since.

 

[cvchief]

Great so now we agree, any business needs to raise enough revenue to meet expenses. I was just confused on the 'cant raise rates' and 'find the money somewhere else' thing. Glad you came around....

Which I never said. Your imaginative reading.

Er, Ok. I was sort of looking here:

It is true that money from future guests at this hotel will be used to pay off past amounts now due, and there might be some impact on the future guests - but mostly it falls on the business and owner.

Where you sort of said future guests mostly won't be impacted much it as it mostly falls on the business and the owner. I just didn't get where the a business gets money except from the customers. It was the microeconomics that had me confused. I got not argument with you macroeconomics stuff on MX policy.

 

[fishi]

What are you drinking? You are doing a poor job of reading what I said as well as restating it in totally different meaning.

It's really simple. Try reading this out loud: Hotels will charge as much as they think they can get, or as little as they have to in order to sale. Whether there are profits, much less sufficient profits to meet needs, varies. Most hotels continue to operate year to year, some sell - as the BA has several times I've seen, and some just close.

I'm confident that Eva will succeed in spite of challenges. Rates will be as high as possible or low as needed regardless of this new issue.

I had the same conversation with cv a year ago in this thread. http://www.scubaboard.com/forums/cozumel/435793-sabor-comments.html


Sunscape did try to raise the price, but it's not hard to get the lower rate (same as 2012). For 2 weeks they sell it for the high price then for 2 weeks they offer it at the low price (same as 2012). They have been pricing it that way all year on Orbits. They weren't very successful at raising the price.


BA is a four-story building without a elevator. How much can you charge people to climb stairs?

 

[cvchief]

My only point is either you raise enough revenue to cover expenses or you sell out. I am not saying anyone can get away with raising rates, just that if you can't and you can't cut expenses, you have to sell. Then the next guy considers the encumbrance against the value of the plant. You can't run a hotel like the government, constantly spending more than you take in. (Unless the BA can print Pesos. If they can, no problem!) I would guess the Sunscape or whatever it is now is a prime example as it goes through sales. How many names has it had? Of course didn't Mossman rave about Secrets? I seem to recall he got a deal, but still he liked the upscale establishment?

 

[ManitouDan]

I'd suggestion taking these last 3-4 pages to a economics board . Or start a new thread about hotel room pricing.