# macro environment case of hilton

Pages: 2 (673 words) Published: September 14, 2014
As a part of the Hilton Group, Double Tree has ‘HHonours’ loyalty program. Today this program works in more than 3500 hotels, has 50 airline partners and gives an opportunity to its members to earn both miles or point for stay. The HHonours has three levels of membership: gold, silver and black with different upgraded system of rewards. Also the members can use the rewards in golf, cruises, entertainment parks, car rentals, shopping and dining (www.businesstravel.about.com).

2. Price elasticity, demand and revenue

Before starting to talk about price elasticity, demand, revenue and the relations between them, it is necessary to explain the definition of each of them. According to Bostock (2014: presentation) price can be inelastic or elastic, so inelastic means that a 1 % change in the price of a good or service has less than 1 % change on the quantity of supply or demand. Logically, the elastic price means that price change of 1 % causes more than 1 % change in the quantity demanded or supplied. Basically, most of goods and services in the world are elastic as far as they are not unique and can be replaced by similar product with best price for the customer. To calculate the price elasticity of demand the next formula is using: percentage change in the quantity demanded divided by percentage change in the price.

The demand from economic point of view is not a need or want of customers to buy a product or service, but they willingness and ability to do so, taking into account the price of the good. If the consumers do not have enough money to purchase the product of service, no matter how much they need it – they will not buy it. This is the core connection between price, its elasticity and demand (Hughes, 1986).

The revenue of the company is all amount of money that organisation has earned during the year (month, decade), which is calculated by multiplying the price per one unit to the number of goods were sold (www.nbcnews.com). As it can be...