Hospitality Markets and the Marketing Environment

Introduction

Hospitality marketing is conducted within a complex system of customers, competitors, destinations, intermediaries, regulators, communities, technologies and internal resources. A hotel, resort, restaurant, cruise company or lodging platform does not market in isolation. Its performance is shaped by forces that it may influence only indirectly, such as inflation, exchange rates, public policy, climate events, transport infrastructure, demographic change and digital-platform governance.

For postgraduate hospitality managers, environmental analysis is therefore more than a description of trends. It is a disciplined process of identifying forces, assessing their strategic significance, evaluating uncertainty and converting insight into decisions about positioning, investment, pricing, distribution and stakeholder relationships.

This chapter integrates four complementary perspectives:

• PESTLE analysis examines the broad macro-environment.
• Porter’s Five Forces examines competitive structure and industry profitability.
• SWOT analysis connects external opportunities and threats with internal strengths and weaknesses.
• Stakeholder analysis examines the interests, influence and legitimacy of groups affected by hospitality operations.

These frameworks are most valuable when used together and supported by evidence rather than treated as mechanical checklists.

Learning Objectives

By the end of this chapter, the learner should be able to:

1. Explain the nature and boundaries of hospitality markets.
2. Analyse political, economic, social, technological, legal and environmental forces using PESTLE.
3. Evaluate industry structure and competitive pressure through Porter’s Five Forces.
4. Analyse competitors, destinations and intermediaries as parts of the hospitality value system.
5. Distinguish internal capabilities from external conditions in SWOT analysis.
6. Map stakeholders according to power, legitimacy and urgency.
7. Apply integrated environmental analysis to strategic hospitality decisions.
8. Critically evaluate the limitations, ethical implications and governance risks of these frameworks.

1. Understanding Hospitality Markets

A market is not simply a place where transactions occur. It is a system in which buyers with particular needs interact with suppliers offering value propositions through exchange mechanisms. Hospitality markets are distinctive because the product is usually a bundle of tangible and intangible elements: accommodation, food and beverage, service encounters, atmosphere, safety, convenience, entertainment and access to a destination.

Hospitality demand is influenced by both purpose and context. Business travel, leisure travel, visiting friends and relatives, medical travel, events and long-stay accommodation involve different decision criteria. The same customer may be price-sensitive for a short business trip but experience-oriented during a family holiday.

Several characteristics make hospitality markets strategically demanding:

• Perishability: An unsold room night cannot normally be stored and sold later.
• Heterogeneity: Service quality can vary by employee, time, customer and channel.
• Intangibility: Customers often purchase expected experiences before consumption.
• Inseparability: Production and consumption frequently occur together.
• Seasonality: Demand may vary by day, season, weather, events and economic cycle.
• Interdependence: A hotel’s value depends partly on airlines, attractions, public services and destination reputation.
• Geographic embeddedness: Hospitality assets are fixed in a location, even when brands and distribution systems are global.

Market boundaries

Managers must define the market before analysing it. A luxury urban hotel may compete not only with comparable hotels but also with serviced apartments, short-term rentals, corporate housing and, in some segments, videoconferencing. A destination restaurant may compete with other restaurants, hotel food outlets, meal-delivery platforms and consumers’ home-cooking alternatives.

Useful market boundaries include:

• Customer segment: corporate travellers, families, backpackers, medical tourists or conference delegates.
• Need served: overnight accommodation, social dining, relaxation, networking or event participation.
• Geographic scope: local, regional, national or international.
• Price and quality level: economy, midscale, upscale or luxury.
• Distribution context: direct booking, travel agency, online travel agency or group contract.

A narrow market definition may hide substitutes; an excessively broad definition may make analysis too vague to guide action.

2. The Hospitality Value System

Hospitality value is created through a network rather than by one firm alone. Key participants include destination-management organisations, transport providers, attractions, wholesalers, travel agencies, online travel agencies (OTAs), payment providers, technology vendors, employees, local residents and public authorities.

A destination’s attractiveness may increase hotel demand, while hotel capacity and service quality may affect the destination’s reputation. Similarly, an airline route can create demand for accommodation, but insufficient accommodation can constrain destination growth. This reciprocal relationship means that managers should analyse both the organisation and the wider ecosystem.

Intermediaries perform important functions: search, comparison, packaging, reservation, payment, information provision and risk reduction. They also influence customer data access, commission costs, ranking visibility and brand dependence. Direct distribution can improve customer ownership and reduce commission, but intermediaries may provide international reach, trust and efficient demand generation.

Useful operating metrics

Hospitality marketing decisions often require basic commercial measures. Average daily rate (ADR) is calculated as:

ADR is expressed in currency per occupied room and excludes rooms not sold. Occupancy is:

RevPAR, or revenue per available room, can be calculated in either of two equivalent ways under consistent definitions:

Here, occupancy rate is expressed as a decimal in the second equation. For example, if a 100-room hotel sells 70 rooms at 120 currency units per room, room revenue is 8,400 currency units, occupancy is 70%, ADR is 120, and RevPAR is 84. These measures describe room revenue performance; they do not by themselves measure profitability, guest satisfaction or total hotel revenue. Taxes, complimentary rooms, out-of-order rooms and the treatment of day-use rooms must be defined consistently.

3. PESTLE Analysis: The Macro-Environment

PESTLE classifies broad external forces into Political, Economic, Social, Technological, Legal and Environmental categories. It is a scanning framework, not a prediction machine. Its purpose is to identify changes that may create opportunities, impose constraints or alter assumptions.

Political forces

Political conditions affect hospitality through stability, public spending, tourism policy, visa rules, taxation, international relations, security policy and infrastructure decisions. A new airport, rail connection or tourism campaign may expand demand. Conversely, conflict, travel advisories, border restrictions or unstable governance may reduce arrivals.

Political analysis should consider both formal policy and implementation capacity. A favourable tourism strategy has limited value if permits are delayed, infrastructure is unreliable or local institutions lack coordination. Managers should monitor election cycles, public-sector priorities, bilateral relations and destination-development plans.

Economic forces

Economic variables include income, employment, inflation, interest rates, exchange rates, consumer confidence, fuel prices and business investment. Hospitality demand is often income-sensitive, but effects differ by segment. A weak domestic economy may reduce discretionary leisure travel while increasing demand for value accommodation or visiting-friends-and-relatives travel.

Inflation creates a managerial dilemma. Raising prices may protect margins but reduce volume or perceived value. Holding prices may preserve demand but erode real profitability. Exchange-rate movements can make a destination cheaper or more expensive for international visitors and can also increase the cost of imported food, equipment and technology.

Economic analysis should distinguish nominal growth from real growth. If room revenue rises by 8% while the general cost base rises by 6%, the apparent improvement may represent only a modest real gain. Managers should also examine disposable income, corporate travel budgets and the distribution of demand across market segments rather than relying on one national indicator.

Social and demographic forces

Social forces include population structure, household composition, lifestyles, education, health concerns, cultural values, attitudes to work and travel, and expectations regarding inclusion. Ageing populations may increase demand for accessibility, health-related travel and slower-paced experiences. Younger segments may value mobile convenience, social spaces, authenticity and flexible work arrangements, although such patterns should not be reduced to stereotypes.

Social analysis also requires attention to residents. Tourism growth can generate employment and cultural exchange but may contribute to congestion, housing pressure and changes in neighbourhood identity. Acceptance by residents is increasingly a condition of destination legitimacy.

Technological forces

Technology influences discovery, booking, pricing, service delivery, operations and reputation. Relevant developments include mobile applications, cloud property-management systems, digital keys, automated revenue management, customer relationship management, generative artificial intelligence, robotics, biometrics and data analytics.

Technology is not automatically strategic. Its value depends on adoption, integration, employee capability, cybersecurity and customer acceptance. Generative AI can assist with content, service recovery drafts and market analysis, but outputs require human oversight because they may be inaccurate, biased, confidential or inconsistent with brand promises. Personalisation also raises questions about consent, profiling and the boundary between convenience and surveillance.

Legal forces

Legal issues include consumer protection, accessibility, employment law, health and safety, licensing, data protection, competition law, intellectual property, taxation and advertising standards. Hospitality organisations may face different obligations across jurisdictions and distribution channels.

Data protection is particularly important because hotels collect identity, payment, travel, preference and sometimes sensitive information. Lawful collection, purpose limitation, access controls, retention rules and breach response should be integrated into marketing design rather than treated as an IT afterthought.

Environmental forces

Environmental pressures include climate change, water scarcity, energy costs, biodiversity loss, extreme weather, waste and carbon regulation. Hotels are resource-intensive operations, especially in relation to heating, cooling, laundry, food and water. Environmental risk can affect physical assets, insurance, labour availability, supply chains and destination attractiveness.

Sustainability claims must be specific and verifiable. Statements such as “eco-friendly” can mislead if they omit significant impacts or rely on unsubstantiated offsets. Effective analysis considers both operational efficiency and wider effects such as transport emissions, local water competition and the social distribution of tourism benefits.

From scanning to strategic interpretation

A useful PESTLE process is:

1. Define the market, destination and planning horizon.
2. Gather evidence from legislation, official statistics, competitor reports, customer research and stakeholder consultation.
3. Identify trends, discontinuities and weak signals.
4. Estimate impact, probability, timing and organisational exposure.
5. Develop alternative scenarios rather than one forecast.
6. Assign indicators and responsibilities for monitoring.
7. Translate findings into decisions, investments and contingency plans.

A trend becomes strategically relevant when it intersects with the organisation’s exposure and capability. For example, water scarcity matters especially to a resort with pools, landscaping and high occupancy in a water-stressed destination.

4. Industry Structure: Porter’s Five Forces

PESTLE explains the broad context; Porter’s Five Forces examines the structure of competition and the distribution of value within an industry. The five forces are rivalry among existing competitors, threat of new entrants, bargaining power of suppliers, bargaining power of buyers and threat of substitutes.

Rivalry among existing competitors

Rivalry is shaped by the number and relative strength of competitors, market growth, differentiation, fixed costs, exit barriers, switching costs and capacity balance. Hotels have high fixed costs and perishable inventory, which can encourage discounting during weak demand. Rivalry is not limited to price: location, brand, loyalty programmes, service design, reviews, amenities and distribution visibility also matter.

Threat of new entrants

Entry barriers include capital requirements, access to sites, planning permission, brand trust, economies of scale, labour availability, technology and customer acquisition costs. Digital platforms may reduce some barriers by enabling supply aggregation, while regulation and scarce urban land may increase others. Conversion of existing buildings can permit entry without constructing a new property.

Supplier power

Suppliers include labour, food producers, technology firms, energy providers, lenders, landlords, brand franchisors and distribution platforms. Supplier power rises when there are few alternatives, switching is costly, inputs are differentiated or the supplier can integrate forward. Skilled labour markets can create significant pressure because service quality depends on employee competence and retention.

Buyer power

Buyers gain power when they have many alternatives, low switching costs, transparent prices, concentrated purchasing volume or strong information. Corporate travel managers and tour operators may negotiate substantial discounts. Individual consumers gain comparison power through review sites and metasearch tools, although their choices may still be influenced by brand trust and perceived risk.

Threat of substitutes

Substitutes satisfy the same underlying need through a different form. Video meetings can substitute for some business trips; short-term rentals can substitute for hotels; day trips can substitute for overnight stays; home delivery can substitute for restaurant dining. Substitution should be analysed by customer purpose, not merely by product category.

Strategic interpretation

Five Forces is most useful for asking why profitability differs across segments and what structural changes may alter competitive advantage. It should not be used to label every stakeholder as a “force” or to assume that competition is always destructive. Partnerships, alliances and destination collaboration may expand the market even while firms compete for individual customers.

5. Competitor, Destination and Intermediary Analysis

Competitor analysis

Competitor analysis examines current and potential rivals’ objectives, resources, positioning, cost structure, distribution, customer experience and likely responses. A competitor profile should combine observable evidence—rates, reviews, capacity, promotions, facilities and staffing signals—with careful interpretation. Managers should distinguish a competitor’s advertised promise from the experience customers actually receive.

Useful comparison dimensions include:

Competitor intelligence must be lawful and ethical. It should not involve deception, misuse of confidential information or unauthorised access to systems.

Destination analysis

A destination includes attractions, accessibility, amenities, image, governance, safety, community attitudes and environmental carrying capacity. A hotel may have excellent internal service but suffer if the destination is inaccessible, unsafe or perceived as inauthentic. Conversely, a strong destination brand may lift weaker individual properties.

Destination analysis should consider the visitor journey before, during and after travel. It should also consider resident experience. Carrying capacity is not a single universal number; it may refer to physical, ecological, social or psychological limits. A destination can be technically capable of receiving more visitors while residents and ecosystems experience unacceptable pressure.

Intermediary analysis

Intermediaries create reach and convenience but may also weaken direct customer relationships. Important questions include:

• What demand and data does the intermediary provide?
• What commission, contractual restrictions or parity requirements apply?
• Who controls the customer relationship and post-stay communication?
• How transparent are ranking and advertising practices?
• Is demand incremental or merely shifted from direct channels?
• What happens if the platform changes its algorithm or terms?

A balanced distribution portfolio normally combines direct channels with selected intermediaries, subject to segment economics, brand strategy and legal requirements.

6. SWOT and the Capability Perspective

SWOT classifies findings as Strengths, Weaknesses, Opportunities and Threats. Strengths and weaknesses are generally internal; opportunities and threats are external. This distinction is essential. “Strong tourism growth” is an opportunity, whereas “effective multilingual sales staff” is a strength.

SWOT becomes strategically meaningful when it evaluates strategic fit. A strength matters only if it is valuable in the relevant market and difficult for competitors to match. A hotel’s historic building may be a differentiator, but it can also be a weakness if maintenance costs and accessibility limitations are severe.

A robust SWOT process:

1. Define the strategic question.
2. Separate evidence from assumptions.
3. Rank issues by impact and controllability.
4. Connect strengths to opportunities.
5. Use strengths to mitigate threats.
6. Correct weaknesses that block opportunities.
7. Develop options, owners, resources and time horizons.

SWOT’s main weakness is that it can become a static list of generic statements. It is improved by capability analysis, benchmarking, scenario planning and explicit causal reasoning. Managers should ask not only “What are we good at?” but also “Which capabilities produce customer value, are rare, are difficult to imitate and are supported by the organisation?”

7. Stakeholder Analysis and Responsible Marketing

Stakeholders are individuals or groups that affect, or are affected by, an organisation. Hospitality stakeholders include guests, employees, owners, lenders, franchise partners, suppliers, intermediaries, regulators, residents, destination organisations, competitors, advocacy groups and the natural environment.

A basic power–interest matrix classifies stakeholders as:

This matrix is useful but incomplete. A resident group may have limited formal power yet possess legitimacy and the ability to mobilise public opinion. The salience model adds power, legitimacy and urgency. Ethical management requires attention not only to those who can affect revenue, but also to those who bear costs without equal influence.

Stakeholder analysis can reveal conflicts: owners may seek rapid returns, employees may seek secure work and fair scheduling, guests may demand low prices, residents may seek reduced congestion, and environmental groups may demand lower resource use. The manager’s task is not to eliminate all conflict but to make trade-offs transparent, lawful and defensible.

8. Integrated Application: The Harbour Light Hotel

The following is a fictional illustrative case.

Background

The Harbour Light is a 180-room upscale hotel in a historic coastal city. It serves leisure visitors, small conferences and weekend domestic travellers. Occupancy is strong in summer but weak in winter. The city government is promoting year-round tourism, while residents are concerned about congestion, housing affordability and water use. An international OTA supplies 38% of bookings, and the hotel’s commission costs have increased. A new rail connection is planned, but construction may disrupt access for two years.

Problem

The general manager must decide whether to invest in a wellness-and-work package, renovate selected rooms, reduce OTA dependence and develop a winter destination partnership. The investment committee is concerned about uncertain demand, climate exposure and reputational risk.

Analysis

PESTLE: Politically, the rail project may improve long-term accessibility but create short-term disruption. Economically, inflation increases renovation and labour costs, while winter demand may be sensitive to disposable income. Socially, remote and hybrid work create possible long-stay demand, but residents expect responsible tourism. Technologically, direct-booking personalisation and revenue analytics are available, subject to privacy controls. Legally, renovation must meet accessibility, safety and heritage requirements. Environmentally, water use and coastal flooding require explicit risk assessment.

Five Forces: Rivalry is high because several branded hotels and short-term rentals compete for the same visitors. Buyer power is increased by transparent online comparison. The OTA has supplier-like power because it controls a large volume of demand and search visibility. Substitutes include serviced apartments and working from home. Entry barriers are moderate because heritage planning restricts new construction, although existing buildings can be converted.

SWOT: Strengths include the hotel’s harbour location, heritage character, conference reputation and experienced staff. Weaknesses include seasonal demand, dependence on one OTA, dated rooms and limited sustainability evidence. Opportunities include rail-linked city breaks, winter cultural events, longer stays and partnerships with local museums. Threats include extreme weather, resident opposition, platform commission increases and aggressive short-term rental supply.

Stakeholders: Owners require a credible return; employees need training and stable schedules; residents require congestion and water concerns to be addressed; the city wants year-round economic activity; guests expect convenience and authentic experiences; the OTA seeks volume and commercial terms; regulators require heritage, accessibility and safety compliance.

Approach and solution

The hotel should avoid a single large bet. A staged strategy is more appropriate:

1. Pilot a winter package combining accommodation, museum access, flexible workspace and public-transport information.
2. Negotiate co-marketing with the destination organisation and cultural institutions rather than relying only on discounts.
3. Renovate a limited number of rooms first, using accessible design, energy-efficient equipment and measurable water reduction.
4. Improve direct booking through clear value-added benefits, not misleading rate discrimination.
5. Build a balanced channel portfolio and calculate net revenue after commissions, marketing costs, cancellations and servicing.
6. Establish a resident advisory forum and publish environmental indicators.
7. Create rail-construction contingency communications and flexible arrival instructions.
8. Review pilot performance using occupancy, ADR, RevPAR, contribution margin, direct-booking share, guest satisfaction, employee workload, water use and resident feedback.

Outcome

After one winter, the pilot increases winter occupancy and direct bookings, but the wellness element performs weakly. Cultural partnerships and flexible work packages perform better. The hotel therefore expands the partnership programme, redesigns rather than fully replaces its wellness offer and postpones a second renovation phase until cash-flow evidence improves. Resident consultation identifies a need to limit coach arrivals at peak times, leading to a revised group policy.

Learning points

The case demonstrates that environmental analysis must lead to choices, not merely descriptions. It also shows why destination collaboration, stakeholder legitimacy, channel economics and staged investment are as important as promotional creativity. A successful marketing strategy can fail if it ignores operational capacity, community acceptance or long-term environmental risk.

9. Limitations, Governance and Contemporary Developments

Frameworks simplify reality. PESTLE categories overlap: climate regulation is environmental, legal and political; AI is technological, legal, social and economic. Five Forces may understate cooperation, ecosystem relationships and rapid platform disruption. SWOT may encourage unsupported opinions. Stakeholder matrices may privilege powerful actors. Managers should therefore document evidence, assumptions, uncertainty and dissenting interpretations.

Contemporary hospitality analysis increasingly involves:

• Platform dependence: Search ranking, commissions and algorithmic visibility can affect demand access.
• Climate adaptation: Flood, heat, water and energy risks must be incorporated into asset and marketing decisions.
• Regenerative and community-centred tourism: The objective is increasingly framed as creating net positive local value, not merely reducing harm.
• Hybrid travel: Business and leisure purposes increasingly overlap, creating new length-of-stay and service requirements.
• Data and AI governance: Personalisation must be balanced with privacy, fairness, explainability, cybersecurity and human accountability.
• Experience authenticity: Customers may value local identity, but commercialisation must avoid cultural appropriation or staged authenticity that displaces local voices.

Best practice is to use multiple evidence sources, revisit assumptions, involve affected stakeholders, test strategies through pilots and scenario analysis, and define both financial and non-financial indicators. Marketing intelligence should be shared with operations, finance, human resources, technology and sustainability teams. Environmental analysis is an organisational capability, not the responsibility of the marketing department alone.

Chapter Summary

Hospitality markets are interconnected systems in which customers, firms, destinations, intermediaries, public authorities, communities and natural resources jointly shape value. Market definition must consider customer need, geography, price, quality and substitutes. Hospitality’s perishability, seasonality, service variability and location dependence make environmental analysis especially important.

PESTLE identifies macro-environmental forces: political, economic, social, technological, legal and environmental. Its value lies in evidence-based interpretation, scenario thinking and monitoring. Porter’s Five Forces examines rivalry, entrants, suppliers, buyers and substitutes, helping managers understand industry structure and profitability. Competitor, destination and intermediary analysis extends this perspective across the hospitality value system.

SWOT links internal capabilities with external opportunities and threats, but it should be evidence-based and connected to strategic fit. Stakeholder analysis adds questions of power, legitimacy, urgency and ethical responsibility. The Harbour Light case illustrates how integrated analysis can support staged investment, channel diversification, destination partnership and responsible governance.

The central managerial lesson is that frameworks are aids to judgement, not substitutes for it. Effective hospitality marketing combines commercial performance with legal compliance, employee welfare, customer trust, destination resilience, community legitimacy and environmental responsibility.

Key Terms

Hospitality market: A system of buyers, suppliers and intermediaries exchanging hospitality-related value.

Macro-environment: Broad external conditions affecting organisations and markets.

PESTLE: A framework for analysing political, economic, social, technological, legal and environmental forces.

Industry structure: The pattern of competitive forces influencing conduct and profitability.

Porter’s Five Forces: A model examining rivalry, entrants, suppliers, buyers and substitutes.

Rivalry: The intensity of competition among existing firms.

Substitute: An alternative that satisfies the same underlying customer need.

Intermediary: An organisation that facilitates search, booking, payment, packaging or distribution.

Online travel agency (OTA): A digital intermediary that sells travel and hospitality inventory.

Destination: A geographic area comprising attractions, access, services, image, governance and community.

SWOT analysis: A framework classifying strengths, weaknesses, opportunities and threats.

Capability: An organisational ability to deploy resources to achieve a purpose.

Stakeholder: A party that affects or is affected by an organisation.

Stakeholder salience: The importance of a stakeholder based on power, legitimacy and urgency.

Occupancy: The proportion of available rooms sold during a specified period.

Average daily rate (ADR): Room revenue divided by rooms sold.

RevPAR: Room revenue divided by rooms available, or ADR multiplied by occupancy rate.

Perishability: The inability to store unused service capacity for future sale.

Carrying capacity: The level of use a destination or resource can sustain without unacceptable effects.

Greenwashing: Misleading presentation of environmental performance or benefits.

Review Questions

5 Short Answer Questions

1. Why is market definition important in hospitality competitor analysis?
2. Identify the six dimensions of PESTLE analysis.
3. What is the difference between a substitute and a competitor?
4. Define RevPAR and state one limitation of the measure.
5. Why should residents be included in hospitality stakeholder analysis?

5 Long Answer Questions

1. Explain how political, economic and environmental forces can jointly affect a coastal resort.
2. Critically evaluate the usefulness and limitations of Porter’s Five Forces in the hotel industry.
3. Explain how OTAs create value for hotels while also creating strategic dependence.
4. Discuss how SWOT can be improved through capability analysis and evidence-based prioritisation.
5. Examine the ethical responsibilities of a hotel developing a destination marketing campaign in a crowded historic city.

3 Analytical / Application Questions

1. A 200-room hotel sells 140 rooms at a room revenue total of 21,000 currency units. Calculate occupancy, ADR and RevPAR, showing the formulas and assumptions.
2. Construct a PESTLE analysis for a resort planning to introduce a low-season wellness and remote-work package. Identify two high-priority risks and propose monitoring indicators.
3. Using Porter’s Five Forces and stakeholder analysis, assess whether a city hotel should increase its dependence on an OTA that offers substantial international demand but requires higher commissions and restrictive contractual terms.

Multiple Choice Questions with Answers

Question 1

Which framework primarily analyses political, economic, social, technological, legal and environmental forces?

A. SWOT

B. PESTLE

C. Porter’s Five Forces

D. Stakeholder salience

Correct Answer: B. PESTLE

Question 2

A hotel’s dependence on a powerful online travel agency is most directly analysed as which force in Porter’s model?

A. Supplier power

B. Threat of substitutes

C. Threat of new entrants

D. Rivalry among employees

Correct Answer: A. Supplier power

Question 3

Which item is an internal weakness in a SWOT analysis?

A. A new airport connection

B. Rising international demand

C. Dependence on one distribution platform

D. A destination tourism campaign

Correct Answer: C. Dependence on one distribution platform

Question 4

A hotel sells 80 rooms in a 100-room property at an ADR of 150 currency units. What is its RevPAR?

A. 80

B. 120

C. 150

D. 230

Correct Answer: B. 120

Question 5

Which stakeholder category should normally be managed closely in a power–interest matrix?

A. High power and high interest

B. High power and low interest

C. Low power and low interest

D. Low power and no relevance

Correct Answer: A. High power and high interest

Question 6

Which characteristic means that an unsold room night generally cannot be stored and sold later?

A. Intangibility

B. Heterogeneity

C. Perishability

D. Inseparability

Correct Answer: C. Perishability

Question 7

Which is an example of a substitute for a business hotel trip?

A. A competing hotel in the same building

B. A video conference

C. A hotel employee

D. A hotel’s loyalty programme

Correct Answer: B. A video conference

Question 8

What is the correct formula for occupancy?

A. Rooms available ÷ rooms sold × 100

B. Room revenue ÷ rooms sold

C. Rooms sold ÷ rooms available × 100

D. ADR × RevPAR

Correct Answer: C. Rooms sold ÷ rooms available × 100

Question 9

Which practice is most consistent with responsible environmental marketing?

A. Using vague claims without evidence

B. Hiding significant environmental impacts

C. Making specific, verifiable claims

D. Treating offsets as proof of zero impact

Correct Answer: C. Making specific, verifiable claims

Question 10

Why should a hotel use scenario analysis alongside PESTLE?

A. To eliminate all uncertainty

B. To replace customer research completely

C. To explore alternative effects of uncertain developments

D. To guarantee a specific occupancy rate

Correct Answer: C. To explore alternative effects of uncertain developments