Microeconomic Aspects of Music Event Realization in Radisson Blu Hotel Essay

Microeconomic Aspects of Music Event Realization in Radisson Blu Hotel of Dubai - Essay Example This essay presents a brief thorough microeconomic analysis of the ticket pricing policy for the music event, that was carried out by the management of Radisson Blu Hotel. One time experience in this hotel during July 2012 music extravaganza posed one of the most technical economic challenges to the management of the hotel and the prospective customers. The problem arose from the unprecedented demand for entry tickets. Dubai is a multicultural metro which hosts many people and musicians are one of the best entertainment sources that attract people from different walks of life. This means that the tickets which were released commensurate to the hall capacity were very few. It is important to note that the concept that was art play in this case was price elasticity. This was a luxurious event which in most cases is price inelastic and increasing ticket and drinks prices did not bring any significant change. This hotel employs a good number of the local people and therefore the benefits derived are reflected in their improved living standard. Such an economic policy like raising the price in such circumstances where the demand is high has economic benefit to the community through the hotel due to increased revenue. It is also important to note that there are some cases where the elasticity concept influences the general response of people when the cost of services or goods is altered. The scenario above did not yield better results as expected due to the price inelastic aspect of the service on offer. In some instances increasing prices will initiate increase in income due to price inelasticity especially in case of luxurious commodities and services. It is also imperative that other control measures are applied towards taming the excess demand rather than pricing policy option. It is important to note that high prices charged by the hotel must be reflected in marginal increase in costs. It is therefore imperative to note that if such actions are not well calculated with regard to economic consequences then outcome of the overall initiative can bring the firm down. Increasing the prices of the tickets that was done in this music extravaganza was used in expansionary production of various dishes as some of the products in this case and acquisition of additional furniture in the hotel. This has the effect of increasing the sitting capacity of the hotel with a multiplier effect which contributes to recruitment of more labor. This means that more members of the community are likely to get employed and extra uptake of input factors like foodstuff raw materials which will translate to increased income to the community. Such events attracts many people especially with consideration of the nature of Dubai and this means that raising the price of tickets is another way of simply boosting the revenue of the hotel due price inelasticity of the event. This high charge also means that the quality of the services and products offered must met some standard that equally has cost effects. The decision to increase