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Taylor Swift and Capacity Utilisation

Geoff Riley

24th August 2023

Doesn't look like there will be many Blank Spaces in the hotel booking systems in some city centres next summer. Demand for budget hotels looks like it will be beyond the hotel operators Wildest Dreams.

The Guardian reports on this surge in hotel demand here.

Travelodge operates around 600 hotels in the UK. They make extensive use of dynamic pricing where room rates are determined by the strength of demand relative to available room capacity.

According to data from Statista, the occupancy rate of Travelodge hotels reached 62.6 percent in 2021. As a result of travel restrictions related to the coronavirus (COVID-19) pandemic, however, the occupancy rate fell to 41.3 percent in 2020 before rising again in 2021 and 2022. Highly successful events such as the Taylor Swift tour will lift their occupancy rate and average revenue per customer - helping top line revenues and bottom line profits.

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

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