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468 promotion, place
$2,000 favourable. Cost variance is computed by
taking the budgeted volume �10,000) and multiplying
it by the difference between the budgeted
cost �$2) and the actual cost �$2.25). The cost
variance was $2,500 unfavourable. Volume variance
is the budgeted cost �$2) times the difference
between the budgeted volume �10,000) and the
actual volume �8,000). The volume variance was
$4,000 favourable.
Most of the variance in variable labour expenses
occurs because of differences in volume, rate and
efficiency. A hotel may budget room attendant
wages of $35,000 based on a forecast of 10,000
rooms sold with average hourly wage of $7 and an
allowed time of thirty minutes to clean a room.
The actual variable labour expense may be
$36,000. The hotel sold 8,000 rooms with an
average hourly wage of $7.50 and averaged thirtysix
minutes to clean a room. The variable labour
expense was $1,000 unfavourable. Volume variance
is the budgeted rate �$7) times the difference
between the budgeted time �5,000) and the
allowable time for actual output �4,000). The
volume variance was $7,000 favourable. Rate
variance is computed by taking the budgeted time
�5,000) and multiplying it by the difference between
the budgeted rate �$7) and the actual rate �$7.50).
The rate variance was $2,500 unfavourable.
Efficiency variance is computed by taking the
budgeted rate �$7) and multiplying it by the
difference between the allowable time for actual
output �4,000) and the actual time �5,000). The
efficiency variance was $7,000 unfavourable.
Further reading
Schmidgall, R. �1997) Hospitality Industry Managerial
Accounting, 4th edn, East Lansing, MI: Educational
Institute of the American Hotel and Motel
Association.
promotion see sales promotions
STEPHEN M. LEBRUTO, USA
promotion mix see marketing; marketing mix;
sales promotions
promotion, place
Communities and regions can be promoted as
destinations and as places in which to live, meet,
invest, relocate or make purchases. Many regions
actively market themselves through development
agencies, while community services play an
important supporting role. Overall environmental
quality and safety, as well as attractive lifestyles,
feature prominently.
Place promotion has at least three dimensions:
image formation and communication, public
policy and marketing activities �Gold and Ward
1994). Marketers attempt to create and disseminate
positive messages which will be received as valid,
believable, distinctive and appealing. Re-imaging is
often needed to deal with bad publicity or to reposition
an area �see positioning). Incentives are
often given to attract investors, media coverage
and special events. New attractions are justified,
and infrastructure must be continuously improved.
Civic amenities and design enhancements
are important. Whole districts are created with an
orientation toward tourists, and commercial and
industrial zones are planned and serviced for
investors. Community recreation services can
be programmed to attract visitors.
Place promotion is typically the responsibility of
trade and economic development offices, convention
and visitor bureaus or tourist offices, and in
some cities, offices of sports, culture and special
events �see also sports tourism). Non-traditional
tools are used, such as facilitating film or
television productions; mega-events and highprofile
`hallmark' events are sought and developed
because of their publicity value. Critics charge that
place promotion commoditises communities, especially
in the absence of public participation.
Problems can also occur when mixed messages are
sent owing to a multiplicity of actors. If promotion
occurs without planning, there is a risk of
exceeding local carrying capacity, and if promotion
is indiscriminate, incompatible or harmful
segments might be attracted. Those engaged in
place promotion might be unable to influence
actual development of infrastructure and supply,
resulting in a quality ±expectations gap. With
these factors in mind, Ashworth and Voogd �1994)