Economics · Level 1 · 121 words
The Cost of an Empty Hotel Room
Original passage © Studio AM, written for Fluency.
A hotel room can be sold for one night only once. If it stays empty on Tuesday, the hotel cannot save that Tuesday night and sell it on Friday. The chance is gone.
This makes a room different from a canned drink. An unsold drink can remain on a shelf. An empty room still creates costs. The building needs cleaning, staff, heat, repairs, and insurance.
Hotels may lower prices when many rooms are open. A smaller payment can be better than no payment. But a very low price may not cover the extra cleaning and service for one guest. Managers therefore balance two risks: leaving a room empty and selling it for too little. Time makes the choice disappear at dawn.
Source: Written for Fluency. Original passage © Studio AM, written for Fluency.