Morrison (1996) considers that hospitality services are perishable in nature. They cannot be
inventoried, hence if a hotel room is unsold in a day it is just like water down the drain and as
Holloway and plant (1996) put it, is revenue lost forever. This character of perish ability means
that capacity and demand management are important for the success of a hospitality
organization. Morrison (1996) asserts that distribution channels of hotel services are such that
customers have to come to the service and hence there is dependence on complementary
organizations such as airlines and other transport services. Holloway and plant (1996) consider
that there is a relationship of services to service providers which they describe as „inseparability‟
of some services from individuals who provide them. In hotels for example, whatever the quality
of the food and however attractive the décor, service is so much an integral part of the product
that it would be unlikely to be purchased from a poor service provider. In a hotel organization it
also implies that both the service provider and the customer must be present for the transaction to
occur.
Cost determination of hotel services is not easy particularly the variable costs, cannot be
precisely estimated as some customers may require more cleaning of a room by the
housekeeping room attendants.