They shed light on the effectiveness of the subject of economics at both the micro and macro level in the hotel industry. Thus, it is clear that the subject of economics plays an important role in the effective functioning of the service sector, namely tourism, and its subordinate unit, the hotel industry.
HISTORICAL BACKGROUND
The Stevens Hotel (now called the Chicago Hilton), followed by the purchase of the Palmer House in Chicago, the Plaza, and the Waldorf-Astoria in New York City, during World War II. However, the hotel industry saw its growth decline during the Great Depression, but pioneering hoteliers such as Texas Oliman, Conrad Hilton were not discouraged.
THE LODGING INDUSTRY
This type of hotel is located on the water surface of rivers or lakes. Lodges: A lodge provides the guest with moderate services, including reservations, suites, public dining, lounge and entertainment facilities, specialty shops, shops, and other recreational facilities.
HOTELIERING IN INDIA
The goal of the federation is to upgrade the professional standards of hotels and to get a fair deal for the hotel industry from the government. Heritage hotels are said to be the old palaces of the kings and monarchs of ancient India.
SIGNIFICANCE OF THE HOTEL INDUSTRY
Its purpose is that the economic impact of the demand for hotel services is not limited to the hotel industry itself, but spreads throughout the entire economy. The growth of the hotel industry and related activities has reached many sectors of the economy.
TOURISM
In view of the immense tourist potential of the state, the hotel industry has a significant role to play not only in the national economy and Indian tourism, but also occupies a crucial position in gearing the parameters of its backward economy, and enrich the regional economy. the state, where the prevalence of poverty, unemployment and inequality is predominant. In 1961, the OECD established a committee for the coordination of studies, the organization of meetings of member countries to improve statistical methods of monetary exchange and accounting of the tourism sector.
FORMS OF TOURISM
The United Nations defines a tourist as a temporary visitor to a country other than the one in which he usually resides for any reason other than to pursue an occupation that is remunerated with the country visited.
OBJECTIVES OF TOURISM
Sales maximization: This is a related but more simplistic objective, in which gross revenue is maximized. It is seen as not striving for maximum profit, sales, output, market share or prestige—.
SIGNIFICANCE OF TOURISM
Tourism helps a country's economy by many multiples of the original tourist dollar. Thus, the money spent by the tourist seeps through many segments of the economy.
GROWTH OF TOURISM
National integration: Tourism contributes to national integration. Over 100 million tourists who visit different parts of the country every year return with a better understanding of the people who live in the different regions of the country and the cultural diversity of the country. The growth of Hinduism, Buddhism, Jainism had led to the growth of foreigners into the country.
FOREIGN EXCHANGE EARNINGS BETWEEN 1991-2001
The Department of Tourism has given high priority to workforce development to meet the growing needs of hotels, restaurants and other tourism industries. The Department of Tourism classifies operating hotels under the 'star system' into various categories from one to five luxury stars.
THE TYPES OF HOTELS
To provide facilities and support the increasing tourist flow, the Paying Guest Accommodation Scheme has been introduced in the major tourist centers.
CONSTRAINTS OF TOURISM
A major constraint in the growth of tourism in India is the lack of adequate infrastructural facilities, especially air transport, the first major step would be to increase the use of private airways to facilitate the movement of tourists within and outside the country. It is seen that since most of the tourist attraction and delivery system as with in the area of state governments.
TOURISM POLICY
It plays an important role in coordinating and complementing the efforts of the State/U.T. Recognizing its importance as an instrument for economic development, a comprehensive tourism policy was announced by the government that emphasized the objectives of tourism development in the country.
Consumption
UTILITY ANALYSIS OF DEMAND
CONCEPTS RELATED TO THE TWO APPROACHES Utility: The want satisfying power of the commodity is known
According to Professor Boulding, "the marginal utility of any quantity of a commodity is the increase in total utility resulting from an increase in unit consumption". Marginal utility is obtained by subtracting the total utility of 20 from its previous value of 10 units.
CARDINAL UTILITY APPROACH
The law of diminishing marginal utility provided the basis for various laws of consumption. The law of demand is also a consequence of the law of diminishing marginal utility.
LAW OF EQUI-MARGINAL UTILITY
- INDIFFERENCE CURVE ANALYSIS
- THE BUDGET LINE OR THE PRICE LINE
- CONSUMER'S EQUILIBRIUM
- CONSUMER'S SURPLUS
- CONSUMER SOVEREIGNTY
A shift in the price line will occur when the price of both goods changes or when the consumer's income changes. When the consumer is on the indifference curve IC1, he buys ON1 and OM1, respectively.
Demand Analysis
MEANING
For example, economists always call the amount for a good in reference to a certain price and a certain time period, such as a month, a year, etc.
FEATURES OF DEMAND
DEMAND SCHEDULE
Individual Demand Schedule
Market Demand Schedule
- DEMAND FUNCTION
- LAW OF DEMAND
The demand for a product depends on an individual's desire and ability to purchase the product. When the good in use has a substitute good, the demand for a good here depends on the price of a substitute good.
Operation of the law of diminishing marginal utility: When a consumer purchases more quantities of a commodity, his
There are several reasons why the demand curve should slope downwards. The law of diminishing marginal utility works: when a consumer buys more quantities of a commodity,
Substitution Effect When the consumer consume two substi- tutable commodities, when the price of one of the commodities
- ANALYSIS OF DEMAND
Substitution effect When the consumer consumes two substitutable goods, when the price of one of the goods.
Extension and Contraction of Demand
When the price rises to OP1, the quantity demanded falls to OM1, this movement of the demand curve from OM to OM1 is known as contraction of demand. This movement of the demand curve from OM to OM2 is called the extension of demand.
Increase and Decrease of Demand
- NATURE OF DEMAND — DISTINCTIONS IN DEMAND Demand for any type of commodity is determined by its nature
Therefore, due to an increase in demand, the demand shifts upwards to the new position, which is D1D1, and the new demand becomes OM1. The movement of the demand curve from OM to OM1 is known as the increase in Demand.
Derived Demand and Autonomous Demand: There are certain commodities which are not end products by themselves but
In this analysis it can be seen that consumer demand changes due to the interaction of other factors such as income, tastes and preferences, habits, fashion which can affect the demand for a product in addition to the main factor which is the price. The demand for those inputs belonging to the category of derived demand is strictly determined by the level of demand of the final goods in the production of which these demanded derived goods are used.
Producers goods and Consumers goods: Producers goods are needed in further production of the end product. Where as the
Producer goods and consumer goods: Producer goods are necessary in the further production of the final product.
Industry and company demand: The total demand for the products of a particular industry refers to industry demand
Short-run and long-run demand: Demand which responds quickly to a change in price is known as short-run demand.
Short run and long run demand: Demand, which reacts quickly to a change in price is known as short run demand,
- FORECASTING OF DEMAND
Short term demand forecasting: This is limited to short period not exceeding one year. It concerns with policies relating
Long-term demand forecasting: Estimating product demand and expanding production units over a long period.
Long term demand forecasting: The assessment of demand for the product and expansion of production units for a long period
Survey Method In this method, the demand forecast for a product is found by conducting a survey with the consumers who.
Survey Method In this method the demand forecasting for a product is found by conducting a survey with the consumers who
Statistical Method: Statistical method uses mathematical tools to predict the future demand for a product. This method is used
Trend Projection: A firm which is already in the market and which has collected data about sales over the previous years, would seek to determine the sales trend for the coming years.
The Method of Moving Averages
The Method of Least Squares
In the time series or trend projection analysis, past data of sales is used to determine the nature of existing trend, this trend is extrapolated into the future and the resulting indicated sales are used on the basis. Some of the common indicators that help indicate the future demand are cement, personal income of consumers.
Elasticity of Demand
- MEANING
- Elastic Demand. When the responsiveness of the change in demand is greater than the responsiveness of the change
- Inelastic Demand. When the responsiveness of the change in demand is less than the responsiveness of the change in
- PRICE ELASTICITY OF DEMAND
- Relatively elastic demand: When the proportion of change in quantity demanded is greater than that of price, the demand is
- Relatively inelastic demand: When the demand for a commod- ity shows a small response to a greater change in price, it is
- Unitary elastic demand: when the proportionate change in the quantity is equal to the proportionate change in the price, it
- Perfectly elastic demand: This is a condition where the demand becomes endless with a given price. A small rise in price will
- MEASUREMENT OF PRICE ELASTICITY OF DEMAND The measurement of price elasticity of demand can be done in
- Point Method
- CROSS ELASTICITY OF DEMAND
- FACTORS INFLUENCING THE ELASTICITY OF DEMAND
- Nature of the commodity: Goods are classified into necessities and luxury commodities based on their usage. The
- Use of the commodity: If the commodity is frequently used its demand becomes inelastic in nature. If the commodity has less
- Substitutes: Commodities having substitutes have elastic demand, and those without substitutes have inelastic demand
- Money spent: Elasticity of demand for a commodity also depends on the proportion of consumers money spent on the
The price elasticity of demand can thus be defined as the ratio between the relative price change. In the first case, when demand is elastic, it is seen that when the price
Production Function
- MEANING
- FEATURES RELATED TO PRODUCTION FUNCTION State of Technology It relates to the state of technology involved
- LAW OF VARIABLE PROPORTION
- ISOQUANT CURVES
- EQUILIBRIUM POINT IN THE PRODUCTION PROCESS A producer is in equilibrium when he is producing the derived
- ECONOMIES TO SCALE
In the short run, however, total product increases with an increase in the variable factor. Thus, with each increase in the variable factor, total product and average product decrease.
Cost of Production
- MEANING
- COST CONCEPTS RELATING TO PRODUCTION FUNCTION
- BEHAVIOUR OF THE AVERAGE COST CURVES Average fixed cost curve: It is the total fixed cost divided by the
- CHARACTERISTICS OF THE LONG RUN COST CURVE
- RELATIONSHIP BETWEEN THE MARGINAL COST AND THE AVERAGE COST CURVES
- BREAK EVEN ANALYSIS
It is also the sum of the average of average variable costs and average fixed costs. Marginal cost is independent of the amount of fixed cost in the short run.
Supply
- MEANING
- SUPPLY AND STOCK
- THE LAW OF SUPPLY
- SUPPLY FUNCTION
- ANALYSIS OF SUPPLY
- Extension and contraction of Supply
- Increase and Decrease of Supply
- ELASTICITY OF SUPPLY
- Perfectly inelastic supply
- Unitary elastic supply
This shows that the supply of goods increases when the price increases and vice versa. The analysis tries to determine how price and various factors affect the supply of goods.
Revenue Analysis
- TOTAL REVENUE
- AVERAGE REVENUE
- MARGINAL REVENUE
- RELATIONSHIP BETWEEN PRICE AND REVENUE UNDER PERFECT COMPETITION
Since the market price is constant without any variation, the marginal revenue and the average revenue will be equal and constant. Hence, the average curve is a descending curve, and similarly, marginal revenues also slope downwards.
Market Structure
MEANING
CLASSIFICATION OF MARKETS
In an imperfect competitive situation, competition is very strong among sellers where they resort to price wars, undercutting prices to capture the market. The market structure is basically divided depending on the competitive situation prevailing in the market.
PERFECT COMPETITION
Since the market includes a large number of sellers, the size of each firm is only a percentage of the market supply. The equilibrium price is the price at which the quantity demanded is equal to the quantity supplied.
Market Period: According to Marshall, it refers to a competitive market in which the commodities are perishable and
To sell excess supply, the buyers lower the price to OP2 where the demand is P2T and the supply is P2V. If demand decreases to D2D2 as shown in the figure, the price will fall to OP2.
Short period: The short period is defined as the period in which the firm is free to vary its output, to a certain extent, as
Thus, it is noted that in the short period, the demand determines the price, as the supply is not only fixed, but the goods used are perishable in nature. When the demand increases, the supply also increases slightly hence the price rises from P to SP1.
Long period: Long period is a period long enough for the firms to alter their output since they can vary their variable factors
- MONOPOLY
- DUOPOLY
- OLIGOPOLY
- MONOPOLISTIC COMPETITION
OQ is the equilibrium level of output determined by the firm in the short run. In such a situation, each seller cannot ignore the price and output of the competitor in the market.
