Wow! You are doing a great job! Now, it’s time to think BIG. You have been asked to reflect on how you can gain a competitive advantage by choosing a specific type of strategy, making a decision about resort fees, and then applying game theory.
- First, you will decide if you are going to charge a resort fee. A resort fee is a fee that is paid for access to certain amenities and is common in casino-hotels but not in limited-service hotels. In 1 paragraph, describe whether or not you will charge a resort fee and why. Finally, use game theory to describe how you would expect your competitors to respond to your decision regarding resort fees.
1) Describe which type of game you expect to be playing. This means that you need to answer if it is a) simultaneous or sequential, b) zero-sum or constant sum, and c) has perfect or imperfect information.
2) Outline the choices you expect your hotel and your competitive set to make in relationship to adaptation of resort fees. These will be binary choices.
3) Describe the potential outcomes for both your hotel and your competitive set based on the set of choices. Please answer if you expect your revenues to go up or down, if your customers will be happy or unhappy, and how it may impact your occupancy.
4) Create a table/diagram that illustrates the potential choices and explain which set of choices creates a Nash equilibrium. Explain why it is the Nash equilibrium.
This section is worth 14 points.
- Consider the 4 corporate-level strategies discussed in Chapter 6 on the text book. Describe the pros and cons of implementing each of these strategies in terms of how they relate to your department. Give at least 2 examples from the hospitality industry with references for each of the strategies. That means there should be a total of 8 examples. There needs to be four sections discussing:
– Concentration Strategy – definition and 2 examples from the hospitality industry.
– Vertical Integration Strategy – definition and 2 examples from the hospitality industry.
– Diversification Strategy – definition and 2 examples from the hospitality industry.
– Mergers and Actuations – definition and 2 examples from the hospitality industry.
– This section is worth 12 points.
- In 1 page describe which one would be helpful for your hotel and why. This needs to be a well-reasons, well-thought out reason for your choice.
This section is worth 4 points.
- Please use research for this assignment and make sure you cite your references using APA style. This means you must have a list of references at the end of your homework in alphabetical order AND you must have in-text citations. An in-test citation looks like this: Previous research suggest that consumers value the relationship they built with hosts while staying at an Airbnb-style accommodation (Belarmino, Whalen, Koh, & Bowen, 2017).
Please make sure that the names of all of your group members are on the assignment.
Failure to follow the correct citation procedures outlined below will result in a loss of 3 points.