Factors influencing pricing in the accommodation sector in South Africa

Abstract

Price is a significant factor of competitiveness. Price is a complex issue and is determined by a variety of demand and supply factors. These factors also differ from industry to industry. The purpose of this article is to determine the factors that influence pricing in the South African accommodation sector. In order to generate proper data, a survey was conducted at various South African accommodation establishments that were obtained from the databases of the three major associations in the accommodation sector. Two-hundred and forty seven questionnaires completed by managers from accommodation establishments were used in this research. Principal component factor analyses with Varimax rotation in STATISTICA were carried out. These resulted in ten factors, namely environmental qualities, amenities, image, management factor, positioning, quality service factor, infrastructure service factor, location, marketing and product quality factor. The results revealed that the major factors in pricing are service quality, image and product quality. Consequently this article can be used to assist managers in pricing and in obtaining a better competitive position in the industry by revising management structures and marketing campaigns.