Microeconomic Aspects of Music Event Realization in Radisson Blu Hotel of Dubai - Essay Example

Music extravaganza in Radisson Blu Hotel of Dubai My past encounter in a music extravaganza in one of the biggest hotelsin Dubai exposed me to the real application of the theoretical economic concepts. It was an eye opener experience with far reaching implications to the general community, consumers, the hotel management and government authorities Dubai is one of the most attractive cities in Middle East within United Arab Emirates. It is considered the commercial hub of this region and brings people from diverse cultures around the world. Radisson Blu Hotel is one of the ultra-modern hospitality cum entertainment facilities in this city. 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. Some globally acclaimed musicians were visiting the hotel dance hall and a number of guests who are I this city were invited. The problem arose from the unprecedented demand for entry tickets which arose due to the interest of the locals as well. 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. The result was a threat of overcrowding from oversubscription due to the large ticket demand. The economic decision that was feasible in this case was to raise the ticket prices and the price of drinks as well to reduce the volume of ticket purchase. Such an experience has double sided effect on the consumers and the firm. It is important to note that the concept that was art play in this case was price elasticity (Mankiw, 2011, 90). 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 prices is a characteristic of monopoly that is propagated by some individuals in the society. These are firms which have the exclusive right to produce a given product or offer a given service. It is also important to note that oligopolistic market structure in which this hotel falls also have the ability to differentiate its products and hence charge their on prices. This is exploitative and calls for government involvement. In respect of the event in this case, tickets values need to be censored by the local council authorities. It is also possible that the hotel management wanted to restrict the number of people getting into the extravaganza by regulating output in the form of number of guests to be accommodated fully. This restriction on output is formulated by the management of various institutions and in this case the high ticket prices were associated with the hotel’s management team as a way of exploiting the guests who were not sensitive to the changes in prices (Landsburg, 2011, 103). The price increase experienced in this event is one among the many cases where producers set exorbitant prices and exploit the high demand by the consumers. Consumers will enjoy the comfort of less crowded environment which boosts security and overall satisfaction. On the other side, the consumers paid more to gain entry into the extravaganza due to the multicultural surrounding that makes the better part of Dubai. This Hotel has many guests from different parts of the world and the socio-cultural diverse dishes will capture different types of clients most of whom are well off and are not bound by changes in prices. However, any restricting measures on output like limiting the capacity of the hall through high prices. This restriction has negative effects to the guests since this is likely to deny their relatives or other companions from gaining entry into the event. Restrictions on the number of tickets are an indirect way of setting high prices to the consumers and at the same time reducing output level. In the context of the hotel experience, it was very possible that one could miss out even if he/she had all the necessary requirements. This translates to net loss to the society and welfare of the consumers. References Landsburg, S. E. (2011). Price theory and applications. Australia, South-Western/Cengage Learning. Mankiw, N. G. (2011). Principles of economics. Mason, Ohio, Thomson South-Western. Read More