Unveiling the Distinction: Cost vs. Price in Hotel Procurement

Understanding the difference between cost and price in hotel procurement is vital for making informed decisions. The terms get used interchangeably all the time, however, their meanings impact the company’s bottom line. Here is what you need to know about cost and price in hotel procurement for a successful buying process.

Defining cost and price

Cost refers to the total expenditure associated with acquiring a product or service. In hotel procurement, it encompasses the financial outlay, operational expenses, maintenance, and risks. Price more simply represents the amount of money paid to obtain just the product.

Factors that influence both cost and price

When analyzing cost, considerations include the total cost of ownership, ongoing expenses for maintenance and management, location, guest satisfaction, and reputation. Price is the monetary value assigned.?

Implications of cost vs. price

When a hotel product price appears attractive, it is important to think deeper about the cost associated with that offering. The cost may include risks or hidden expenses that aren’t reflected in what looks like a fair price. A product with a lower price may have higher operating cost , shorter warranty, less durabilty or lesser quality of building materials?

At Stroud Group, we aim to help you stay within the budget for your hotel project, all the while analyzing costs and making you aware of all their implications. Contact us today to work with an experienced team of hotel procurement professionals.