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Price Sensitivity to Tourism Activities: Looking for Determinant Factors

Author

Listed:
  • Lorenzo Masiero

    (Institute for Economic Research (IRE), Faculty of Economics, University of Lugano, Via Maderno 24, CP 4361, CH-6904 Lugano, Switzerland)

  • Juan L. Nicolau

    (Department of Financial Economics, Accounting and Marketing, Faculty of Economics, University of Alicante, Spain)

Abstract

The literature contains evidence that there is a marked heterogeneity in price responses to tourism products, leading to a great variety of tourist sensitivities to price. Thus the role price plays is complex, and a particularly challenging aspect of this complexity is that its effect is not unambiguous, thereby negating the idea that the demand for tourism products and tourist activities can always be regarded as demand for ordinary goods. This article identifies and explains, as a novelty for the tourism industry, price sensitivities to tourism activities individual by individual. The operative formalization uses a mixed logit model to estimate the individual sensitivities to price, and then a regression analysis is applied to detect their determinants. The empirical application finds that motivations, influenced by age, and length of stay with a non-linear effect, are explanatory factors of tourists' price sensitivity to activities.

Suggested Citation

  • Lorenzo Masiero & Juan L. Nicolau, 2012. "Price Sensitivity to Tourism Activities: Looking for Determinant Factors," Tourism Economics, , vol. 18(4), pages 675-689, August.
    • Handle: RePEc:sae:toueco:v:18:y:2012:i:4:p:675-689
    DOI: 10.5367/te.2012.0143
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    References listed on IDEAS

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    1. Marie-Louise Mangion & Ramesh Durbarry & M. Thea Sinclair, 2005. "Tourism Competitiveness: Price and Quality," Tourism Economics, , vol. 11(1), pages 45-68, March.
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    5. Louviere,Jordan J. & Hensher,David A. & Swait,Joffre D. With contributions by-Name:Adamowicz,Wiktor, 2000. "Stated Choice Methods," Cambridge Books, Cambridge University Press, number 9780521788304, January.
    6. Thomas F. Cannon & Jamie Ford, 2002. "Relationship of Demographic and Trip Characteristics to Visitor Spending: An Analysis of Sports Travel Visitors across Time," Tourism Economics, , vol. 8(3), pages 263-271, September.
    7. John P. Moriarty, 2010. "Have Structural Issues Placed New Zealand's Hospitality Industry beyond Price?," Tourism Economics, , vol. 16(3), pages 695-713, September.
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    Cited by:

    1. Manuel Rodríguez-Díaz & Rosa Rodríguez-Díaz & Ana Cristina Rodríguez-Voltes & Crina Isabel Rodríguez-Voltes, 2018. "Analysing the Relationship between Price and Online Reputation by Lodging Category," Sustainability, MDPI, vol. 10(12), pages 1-16, November.
    2. Ma, Jun & Nault, Barrie R. & Tu, Yiliu (Paul), 2023. "Customer segmentation, pricing, and lead time decisions: A stochastic-user-equilibrium perspective," International Journal of Production Economics, Elsevier, vol. 264(C).
    3. Manuel Rodríguez-Díaz & Crina Isabel Rodríguez-Voltes & Ana Cristina Rodríguez-Voltes, 2019. "Determining the Relationships between Price and Online Reputation in Lodgings," Administrative Sciences, MDPI, vol. 9(3), pages 1-27, July.
    4. Juan L. Nicolau & Lorenzo Masiero, 2013. "Relationship between Price Sensitivity and Expenditures in the Choice of Tourism Activities at the Destination," Tourism Economics, , vol. 19(1), pages 101-114, February.
    5. Emanuele Breda & Rita Cappariello & Valentina ROmano, 2018. "International tourism in Italy: recent trends, potential demand and a comparison with the main European competitors," Questioni di Economia e Finanza (Occasional Papers) 475, Bank of Italy, Economic Research and International Relations Area.
    6. Engelina du Plessis & Melville Saayman, 2018. "Aspects contributing to tourism price competitiveness of South Africa," Tourism Economics, , vol. 24(2), pages 146-156, March.
    7. Noemi Rota & Claudia Canedoli & Oscar Luigi Azzimonti & Emilio Padoa-Schioppa, 2023. "How Do People Experience the Alps? Attitudes and Perceptions in Two Protected Areas in Italy," Sustainability, MDPI, vol. 15(4), pages 1-19, February.
    8. Adam Blake & Mondher Sahli & Neelu Seetaram, 2012. "Introduction," Tourism Economics, , vol. 18(6), pages 1155-1159, December.
    9. Anappattath Muhammed Salim & Thomas Shiby M., 2023. "Demand for Kerala’s International Tourism by the Top Three Source Markets: A Comparative Analysis," Acta Universitatis Sapientiae, Economics and Business, Sciendo, vol. 11(1), pages 208-226, October.
    10. Taiga Saito & Akihiko Takahashi & Noriaki Koide & Yu Ichifuji, 2017. "Optimal overbooking strategy in online hotel booking systems¡ÊRevised as "Application of Online Booking Data to Hotel Revenue Management" in F-448¡Ë," CARF F-Series CARF-F-421, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
    11. Ferrer-Rosell, Berta & Martínez-Garcia, Esther & Coenders, Germà, 2014. "Package and no-frills air carriers as moderators of length of stay," Tourism Management, Elsevier, vol. 42(C), pages 114-122.
    12. Nazia Nabi, 2023. "Segmenting travellers of luxury destinations in a post-pandemic era," Service Business, Springer;Pan-Pacific Business Association, vol. 17(3), pages 747-770, September.
    13. Uma Murthy & Paul Mariadas & Gopal Perumal, 2016. "The Behaviors of Generation Y Tourists from Asean Countries towards Malaysian Tourism Industry in Kuala Lumpur, Malaysia," International Journal of Business and Management, Canadian Center of Science and Education, vol. 11(12), pages 249-249, November.

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    More about this item

    Keywords

    tourism activities; response to price; price sensitivity; market heterogeneity; tourist choice;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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