Perishability
As production and consumption in H&T organizations are simultaneous, services become perishable if they are not sold. Subsequently, their value is lost forever. For example, an airline seat or a hotel room will perish if a customer does not purchase it at the time of production. Therefore, the full utilization of service capacity is a strategic task for many H&T organizations. It is particularly important to emphasize that demand for an H&T organization’s services often fluctuates considerably, depending on the external developments and changes, such as seasonality and crises. For instance, terrorist attacks (such as September 11, 2001 in New York), disease outbreaks (such as SARS in the Far East), and natural weather phenomena (such as tornadoes or hurricanes) all had a negative impact on the demand for services offered by the H&T industry worldwide. Because H&T organizations cannot sell their services when such circumstances arise, they lose a considerable amount of nonrecoverable income. When the demand is low or there are sudden fluctuations in demand, it is neither easy nor recommended for H&T organizations to lower their rates greatly, since it may influence their image, change their customer segment, and upset their regular customers.