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Revenue Management Woordenlijst

Inelastic Demand

Definitie

Inelastic Demand occurs when changes in price have little to no effect on the quantity of a product or service that consumers purchase. In a hotel context, this means that guests continue booking rooms even if prices increase or decrease, often because of necessity, limited alternatives, or urgency.

Hoe te gebruiken

Revenue managers identify Inelastic Demand when: Price changes (up or down) don’t significantly affect booking volume, events, holidays, or peak seasons drive demand regardless of rate, the hotel serves a niche market or has little local competition or guests book for reasons beyond price (e.g., location, convenience, loyalty).

Formule

Measured using the Price Elasticity of Demand (PED): PED = (% Change in Quantity Demanded) ÷ (% Change in Price)

Verwante termen

Elastic Demand, Price Sensitivity, Revenue Optimization, Demand Segmentation, Dynamic Pricing
“When demand is inelastic, price becomes a tool—not a risk. It’s a signal to optimize profitability without worrying about losing business.”

Sarah Kock

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