Institute of Commercial Management | Qualification Subject

Economics & Hospitality

ICM Professional Diploma Unit

The Approach to Economics

  • The definition and meaning of economics
  • Scarcity and choice
  • The importance of marginal analysis
  • Capital and income
  • The business firm
  • The financial features of businesses
  • Business perspectives

The Market

  • The market system
  • Market stability
  • Government controls
  • Change in the market
  • Changes in demand
  • Changes in supply
  • Market changes in practice
  • Short-term and long-term effects of change in demand
  • Short-term and long-term effects of change in supply
  • Elasticity and its application
  • Applying supply and demand
  • Implications for management

Economic Trends Affecting the Hospitality Industry

  • Defining the economy
  • Measuring the economy
  • Measuring changes in output
  • Trends in the economy
  • Economic growth
  • Reasons for economic growth
  • Structural change in the economy
  • Economic trends and the hospitality industry
  • Time, cost and economic change
  • Economic growth and household changes
  • Economic growth and the hospitality industry

Structural Change in the Accommodation, Food and Drink Sectors

  • A note on spending and income
  • The accommodation sector
  • The eating out sector
  • The drinks sector
  • Contract services

Macroeconomic Fluctuations and the Hospitality Industry

  • Boom follows slump follows boom: stages of the macroeconomic cycle
  • Aggregate demand and supply
  • Why fluctuations in output occur
  • Government macroeconomic policy
  • Views on macroeconomic policy
  • The impact of the macroeconomy on the hospitality industry
  • Predicting macroeconomic changes
  • Implications for management

The Hospitality Industry and the Local Economy

  • Tourism life cycle and local development
  • Multiplier analysis of the local impact of tourism
  • The multiplier process
  • Multiplier studies

Costs and Market Structure

  • Market structure
  • Economies of scale and scope and experience
  • Sources of economies of scale and scope
  • Economies of scale and scope in the hospitality industry

Market Structure and Market Control

  • Pricing for profit
  • Comparing monopoly and competition
  • Dominant firms and oligopolies
  • Market structure and social efficiency
  • Government control of monopolies

Strategic Product Development and Delivery

  • Goods and services
  • Costs of production
  • Planning the production of hospitality services
  • Production planning in a changing environment
  • Service quality

Business Operations

  • Efficient production
  • Use of labour
  • Investment decisions
  • Organising production: the economic role of firms

Business Development

  • Risks and financial requirements of a business during development
  • Vertical integration
  • Mergers
  • Franchising: solution for a dispersion market
  • Internationalization

Pricing and Product Development

  • Strategic development and pricing
  • Pricing methods for hospitality services
  • Differential pricing for demand management
  • Price discrimination
  • Load pricing
  • Application of differential pricing
  • Hotel occupancy and capacity utilisation
  • Pricing in special situations

Maintaining and Developing Your Economic Skills

  • An analytical framework
  • Planning reading
  • Reading the industry literature

Example Candidate Response Booklet

Example Candidate Response (ECR) Booklets are a source of crucial information for Centres and Candidates as they use real candidate responses. We ask Senior Examiners to comment on five or more responses in terms of why the mark was awarded with commentary about how to improve the answer (if necessary).

Recommended Reading

Main Text:

Economics for Hospitality Management – Peter Cullen (Thompson Business Press)

Indicative Text:

Alternative Text and Further Reading: