Journal of Applied Economic Research
ISSN 2712-7435
Optimality of Relationship of Cost and Quality of Hotel Services in Small Towns: Analysis of the Situation in Russia and Germany
Molchanova T.K., Babich V.A. Yashalova N.N. Ruban D.A.
Abstract
Socio-economic development of small towns in Russia is a serious problem that can be addressed through growth of the hospitality industry. Launching new hotels would make it possible to increase the number of tourists, as well as to strengthen external economical relationships. However, client satisfaction with the quality of hotel services itself and its relation to the cost of accommodation are important. The aim of the present work is to study the relationship of cost and quality of hotel services in small towns using the case of the Central Federal District of Russia and Hessen in Germany. The working hypothesis implies that the cost of services should increase together with their quality in the optimal case. The methodology of this work includes collection of data on the cost of accommodation and customer evaluations of services in hotels of small towns of the above-mentioned territories, as well as qualitative (graphical) and quantitative (with correlation coefficient) analysis of their relationship. An analysis of prices for accommodation in standard rooms (cost) and client satisfaction scores (perceived quality) at the hotels of small towns of the Central Federal District reveals total absence of their correlation. This appears both at the level of individual collective accommodation facilities and the level of the entire municipal hospitality industry. By contrast, a similar analysis for Hessen in Germany shows a noticeable cost growth along with the improvement of the quality of services, which should be considered the optimal relationship. This proves an assumption that after reaching a certain level of quality, its further growth triggers a progressive increase in the cost of hotel services. The value of the correlation coefficient for cost and quality of services of the hotel industry of the small towns of the Central Federal District (calculated by town) is –0,12, and +0,72 in the case of Hessen. Evidently, pricing at hotels is very chaotic in small towns of Russia. This is determined by the irregularity and non-saturation of the local hotel markets and inherently wrong pricing targets (or the absence of such targets). Market mechanisms can contribute to normalization of the situation, but only in the far future. The practical significance of this work is linked to the detection of a significant problem on organizational and municipal levels and discussion of its possible solutions. Relationship of cost and quality of hotel services in small towns of Germany can be adopted as a target. The authors believe that administrative authorities and professional associations of hoteliers should define the key targets of pricing and encourage entrepreneurs to adhere to them.
Keywords
hospitality industry; correlation analysis; pricing policy; Hessen; Central federal District.
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About Authors
Molchanova Tatyana Konstantinovna – Master's Degree Student, Higher School of Business, Southern Federal University, Rostov-on-Don, Russia (344019, Rostov-on-Don, 23-ja linija Street, 43); e-mail: studentsrda@mail.ru.
Babich Valeria Andreevna – Master's Degree Student, Higher School of Business, Southern Federal University, Rostov-on-Don, Russia (344019, Rostov-on-Don, 23-ja linija Street 43); e-mail: studentsrda@yandex.ru.
Yashalova Natalia Nikolaevna – Doctor of Economical Sciences, Associate Professor, Head of Department of Economics and Management, Business School, Cherepovets State University, Cherepovets, Russia (162600, Vologda Region, Cherepovets, Sovetskiy Avenue, 10); e-mail: natalij2005@mail.ru
Ruban Dmitry Aleksandrovitch – Philosophiae Doctor, Candidate of Geological-Mineralogical Sciences, Associate Professor, Higher School of Business, Southern Federal University, Rostov-on-Don, Russia (344019, Rostov-on-Don, 23-ja linija Street, 43); e-mail: ruban-d@mail.ru.
For citation
Molchanova T.K., Babich V.A., Yashalova N.N., Ruban D.A. Optimality of Relationship of Cost and Quality of Hotel Services in Small Towns: Analysis of the State in Russia and Germany. Bulletin of Ural Federal University. Series Economics and Management, 2018, Vol. 17, No. 5, 772-797. DOI: 10.15826/vestnik.2018.17.5.035.
Article info
Received August 29, 2018; Accepted September 27, 2018.
DOI: http://dx.doi.org/10.15826/vestnik.2018.17.5.035
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