What is the pricing in tourism?

Download full-text PDFRead full-text Economic parameters which affect on domestic tourist fl ows Domestic tourist arrivals and overnight stays ('000) The most signifi cant correla

What is the pricing in tourism?

Download full-text PDFRead full-text

Economic parameters which affect on domestic tourist fl ows

Economic parameters which affect on domestic tourist fl ows

Domestic tourist arrivals and overnight stays ('000)

Domestic tourist arrivals and overnight stays ('000)

The most signifi cant correlation between the observed elements

The most signifi cant correlation between the observed elementsFigures - uploaded by Svetlana VukosavAuthor contentAll figure content in this area was uploaded by Svetlana VukosavContent may be subject to copyright.Content uploaded by Svetlana VukosavAuthor contentAll content in this area was uploaded by Svetlana Vukosav on Feb 10, 2022 Content may be subject to copyright.                                                     5The Importance of Prices in Tourism Industry - The Impact of Growth of Prices of Hospitality Services on the Domestic Tourism DemandOriginal scientifi  c article                                                                                                 UDC 338.57.055.2:338.48Received: 12. December 2017;                                                                                         doi: 10.5937/zrgfub1866005G Received in revised form: 13. December 2017;Accepted: 19. January 2018;Available online: 25. January 2018                                                           THE IMPORTANCE OF PRICES IN TOURISM INDUSTRY - THE IMPACT OF GROWTH OF PRICES OF HOSPITALITY SERVICES ON THE DOMESTIC TOURISM DEMANDVuk Garača*1, Svetlana Vukosav*, Nevena Ćurčić*, Milan Bradić**  University of Novi Sad, Faculty of Sciences, Departament of Geography, Tourism and Hotel Management, Novi Sad Abstract: Practice has shown that prices, an important economic factor, have a signifi cant effect on the choice of tourist destination, i.e. they have a direct impact on the tourism demand and add to its elasticity. More often than not, the connection between the prices in the hospitality industry and tourism demand dynamics is not a simple one. Many various factors besides prices in the hospitality industry infl uence the decision on a tourism trip, rendering this connection very complex. The effect of prices on domestic tourism demand is particularly evident in developing countries with low avarage salaries. To be better able to objectively perceive the effect of price growth in the hospitality industry, in addition to the basic parameters (prices in hospitality services, domestic arrivals and overnight stays of domestic tourists), we also analysed the cost of life, average salaries and changes in the euro exhange rate. All the parameters are for Serbia and they cover a period of fi fteen years, 2002-2016. The principal method used in the research is the statistical method of linear correlation analysis, where the linear correlation coeffi cient was taken as an indicator.Keywords: prices, impact, basic and corrective factors, domestic tourism demand, hospitality industry.1  Corresponding author: V. Garača, University of Novi Sad, Faculty of Sciences, Departament of Geography, Tourism and Hotel Management, Novi Sad; e-mail:                                                                                                                                                                                         6Collection of Papers - Faculty of Geography at the University of Belgrade 66 (1)IntroductionTourism is an economic activity that is largely dependent on the discretion-ary decisions of consumers, i.e. tourists. Consumers have a wide range of op-tions to maximise their personal satisfaction (Bošković, Težak, Saftić, 2010). At the same time, consumers are constantly exposed to the economic and non-eco-nomic factors, which add to the distinct elasticity of tourism demand (Hanafi ah, Harun, 2010; Tse, 2001). Economic factors are personal income, prices, exchange rate, etc. whilst non-economic factors include wars, natural disasters (fi re, fl ood, earthquake), epidemics, environmental disasters, crises, etc. (Bakić, 2000).Prices, as an economic factor, have a signifi cant effect on tourist fl ow, i.e. have a direct impact on tourism demand and add to its elasticity (Crouch, 1992). On the one hand, the low-price strategy is normally used to attract more tourists, particularly to new tourist destinations whose promotion on the global tourism market has just started (Forsyth & Dwyer, 2009). On the other hand, the high-price strategy is used where a mass tourism destination is to be turned into an exclusive destination. As a result, tourist numbers drop, which means that there is less pressure on the space, cultural and natural goods, whilst total spending is maintained or even increased (Tohidy, 2011). The relationship between the coeffi cient of elasticity of tourists (as consumers) and the increasing prices in the tourism sector, mainly in the hospitality industry, has been a subject of much research by both domestic and foreign scientists (Dwyer et al., 2000; Greenidge, 2001; Forsyth & Dwyer, 2009). The relationship between the prices in the hospitality industry and tourism demand is usually not simple and is dependent on a number of different factors that infl uence the decision on tourism trip (Morley, 1994; Dwyer, Frosyth, Rao, 2000). In fact, the relationship is quite complicated, especially where it concerns consumers in developing countries (Tkalec & Vizek, 2016). To understand the effect of price growth in the hospitality industry on the domestic tourist fl ow in the context of the economic conditions in Serbia, in addition to analysing the basic parameters such as prices in the hospitality industry and elements of tour-ist fl ow (the number of domestic arrivals and nights spent by domestic tourists), the cost of living, average salary and the euro-dinar exchange rate in Serbia have also been taken into account. All the observed parameters cover a period of fi f-teen years, from 2002 to 2016.The analyses of tourism fl ows in many countries show that the international to domestic arrivals ratio is between 1:5 and 1:6 (to one arrival in international tourism there are fi ve to six arrivals in domestic tourism). In other words, in 2014, on 1 billion international arrivals there were 5-6 billion domestic arrivals (UNWTO Tourism Highlights, 2014 edition, 2015, 2).                                                                                                                                                                                                7The Importance of Prices in Tourism Industry - The Impact of Growth of Prices of Hospitality Services on the Domestic Tourism DemandPrice as an instrument of business policy in the hospitality industryMeeting the needs of consumers is a prerequisite for the realisation of eco-nomic goals of any company. In this context, the price is regarded as an instru-ment in a companys business policy. The importance of prices in the economic theory and practice is demonstrated in the fact that all the important indicators of the functioning of economic operators are refl ected in prices (Granovetter, 2005). A pricing policy is a guiding philosophy or course of action designed to infl uence and determine pricing decisions. It should provide an answer to the question: How will price be used in the marketing mix? (Rowley, 1997). Pricing in the hospitality industry is infl uenced by external and internal fac-tors. Internal factors include costs, organisation, working conditions. Cost is one of the key internal factors. However, its effect is limited as it determines only the price threshold (Kosar, 2002). The effects of external factors on pricing are more pronounced.The strong infl uence of external factors is refl ected in the complexity of op-eration of market mechanism. Market-related factors include a stage in a prod-ucts life cycle, price elasticity, competition, product and service differentiation (Morley, 1994; Mangion et al., 2005). Hospitality fi rms use various methods to set prices for their products. According Kotler (2005) hospitality managers often select different pricing approaches based on a combination of several  factors, which include a fi rms cost structure, competitors prices and customer value perceptions of hospitality services. Cost-based pricing usually involves mark-up techniques using actual variable costs (product costs) at a desired product cost percentage. This pricing method is commonly used to set menu prices in restau-rants. Alternatively, pricing methods based on customers value perceptions of hospitality products exclude the consideration of costs and attempt to provide value by offering high quality at reasonable prices (Lewis and Shoemaker, 1997; Shoemaker et al., 2006). Economic growth refl ects in wage growth and in increased spending on tourism. However, in the times of economic recession and low salaries con-sumers will reduce their spending both on their basic and on auxiliary needs. Tourism demand is sensitive to the changes in prices in the hospitality industry. As one of the key elements in determining consumer preferences, prices are the means of competitive fi ght of receiving countries or destinations gaining in im-portance in the conditions of infl ationary changes.  It should be borne in mind that the demand sensitivity is linked both to travel motivation and to the type of service where the price correction is done. Thus, generally speaking, business trips have a distinct price elasticity.                                                                                                                                                                                                8Collection of Papers - Faculty of Geography at the University of Belgrade 66 (1)A stadium in a product life cycle has its specifi c application in tourism and, by that very fact, in the hospitality industry. From the aspect of service pric-ing, a product life cycle comprises the following stages: introduction, decline and revival. In the introduction stage, a decision is made to go with somewhat lower prices than those in renowned destinations and establishments with simi-lar characteristics. The aim of the low-cost strategy as an instrument of business policy is to ensure the best possible market position for the new establishment. In the decline stage, however, where technical, technological and organisation-al business conditions have become outdated, the aim of the low-cost strategy is for the establishment to maintain old market positions. Finally, the revival stage, which follows technical and technological innovations and introduction of the latest business models, allows for certain increase in prices (Mazanec et al., 2007). Therefore, the structure of the newly formed selling prices should be examined, bearing in mind the increase in the cost due to the upgrading of the establishment. Price elasticity is the range between the highest and the lowest selling prices. The specifi c characteristics of tourism and hospitality industries such as seasonally incongruous demand show seasonal differentiation of prices and, by that very fact, their elasticity.  The range between the highest price in full season and the lowest price off-season can be quite signifi cant. However, the timeframe during which the pressure of the demand allows for the highest selling prices is very short, so we cannot talk about great elasticity. Similarly, the limiting factors determining the price ceiling (general situation on the tourist market, prices in elite establishments in renowned tourist destinations, purchasing power driv-ing certain segments of demand, etc.) should also be taken into consideration. As regards threshold price, it is, as we know, determined by operating costs. However, even where more substantial price reductions are possible off-season, their effects are limited by a number of factors (limited free time, habits, trans-port, climate, weakened recreational characteristics of natural resources etc.) (Djeri et al., 2014). In practice, the demand elasticity in relation to the prices is refl ected in reduced tourist fl ow due to increased prices and/or in increased tourist fl ow due to reduced prices. The correlation between changes in prices in the hospitality industry and demand fl uctuations as their consequence can be expressed quantitatively using the elasticity coeffi cient. A standard response of the demand to the changes in prices is either a growing or falling demand (tour-ist fl ow) proportionate to the falling or growing prices, respectively. However, in tourism, there are deviations from standard elasticity. Instead of tourist fl ow proportionately decreasing as a result of increased prices, it progresses. In other words, in tourism, tourist fl ow tends to decrease more rapidly than the prices tend to increase. Similarly, reduced prices do not usually lead to a proportionate increase in tourist fl ow but they cause its increase by degression. Faster decrease                                                                                                                                                                                                 9The Importance of Prices in Tourism Industry - The Impact of Growth of Prices of Hospitality Services on the Domestic Tourism Demandin tourist fl ow in comparison with an increase in prices, or slower increase in tourist fl ow in comparison with a decrease in prices, indicates greater demand sensitivity (elasticity) to the increase than to the decrease in prices (Kosar, 2002). Understandably so, considering that we are talking about about meeting the needs that are not of existential nature.Competition is an important factor of pricing in tourism and in the hospital-ity industry. From a macroeconomic aspect, it is understandable that the place-ment of a countrys offer on the international market is largely determined by the prices, primarily the prices of hotel services. This is especially evident in larger geographical areas with similar natural attractions (e.g. the Mediterranean) of-fering hotels of the similar standard quality. The substitution is easy due to the high consumer mobility. In such cases, where the prices are relatively uniform, a subjective understanding of the quality or the users personal experience is based on non-material components of a hotel and tourism product. In other words, an individual offer carrier (an accommodation establishment or a com-pany) is limited when it comes to independent pricing in the conditions of in-ternational competition. Naturally, the effects of competition are present on the local level as well. This means relatively small price ranges for the same type and category of establishment. Deviations from the prices of basic (hospitality) services in the establishments of the same type and category often come down to the differences in microlocation, transport network, condition of the equip-ment, additional amenities (Hung et al., 2010). Market-related factors indicate that pricing in hospitality industry is a complex and technical activity that that has to take into consideration all the specifi cities of tourism business. Bearing this in mind, other external factors should not be ignored, namely (Durbarry & Sinclair, 20003): the spatial geographic criterion (the location of an establishment relative to the various types of tourist resources of various degrees of attraction); time criterion (when the services are used, the length of stay); various demand segmentation criteria (nationality, motivations for visiting, gender, age, etc.); position in the market chain; terms of payment; types of services, etc. Practice has shown that the effects of these factors come to light on a micro level, i.e. in the business environment of certain operators. Here, of course, the effects of these indicators are analysed on a macro level. Data collection and processing methodsSeveral different methods were used in the research: (1) research of primary and secondary material, (2) statistical method, (3) synthetic, comparative, criti-cal and descriptive methods.                                                                                                                                                                                                10Collection of Papers - Faculty of Geography at the University of Belgrade 66 (1)Research of primary and secondary materialDesk research is the analysis of primary and secondary material. This meth-od was used to collect the statistics for domestic tourist fl ow (arrivals and nights spent) in Serbia. The statistics were collected from the offi cial publications of the Serbian Statistical Offi ce. In addition, a number of domestic and foreign scien-tifi c sources addressing the issues researched in this paper were used.Statistical methodThe statistics collected in the fi rst stage (desk research) were processed using various statistical methods. Primarily, correlation analysis was used to examine the strength (intensity) of quantitative correlation of the observed phenomena. The linear (Pearson) correlation indicators are: coeffi cient of determination, co-effi cient of non-determination and correlation coeffi cient (Stojković, 2008). For the purposes of this paper only the correlation coeffi cient was used. Linear correlation coeffi cientLinear correlation coeffi cient  (r12) shows the strength (intensity) of linear correlation between variables X1 and X2, where:21212 rr  The coeffi cient value is in the interval -1  r2  1, where there is a statistical correlation between the observed phenomena. Where r12 = 0, there is no correla-tion between variables X1 and X2, whilst where r12 = ±1, the correlation exists and it is functional. In statistical theory and practice there are two levels of correla-tion signifi cant: 0.05 and 0.01. We were used the second one.Other methodsThe following methods were also used in this paper: the synthetic method, where the conclusions were based on the systematic analysis of secondary ma-terial and the data obtained in fi eld research; the comparative method, where the data found in the literature were compared with the data obtained in fi eld research; the critical method, where we took a critical approach to the data from the literature and the data obtained in fi eld research or in the statistical process-ing, and the descriptive method, where we tried to explain the results obtained.                                                                                                                                                                                                11The Importance of Prices in Tourism Industry - The Impact of Growth of Prices of Hospitality Services on the Domestic Tourism DemandKey elements of the researchTo have the best understanding of the intensity of the effect that prices in the hospitality industry have on domestic arrivals and overnight stays of do-mestic tourists, the following factors were taken into account: domestic arrivals, overnight stays of domestic tourists and prices in the hospitality industry. The factors that have an indirect effect on the observed correlation, namely the cost of living, average salaries and the euro exchange rate2were also taken into ac-count, as a corrective factor. The observed elements cover a continuous fi ftteen-year period (2002-2016) for the territory of Serbia. Price index in hospitality industryThe parameter price index in the hospitality industry indicates the chang-es in hospitality prices, i.e. in the prices of hotel and restaurant services, and as such may indicate structural changes in tourism or, compared with the euro exchange rate, the harmonisation of prices with the infl ationary wave. Table 1. Economic parameters which affect on domestic tourist fl owsYearHospitality industry price index (%)Consumer price index(%)Average salaries (RSD)Average salaries ()Euro exchange rate (RSD)2002 100.0 100.0 9208 152 60.62003 110.5 113.2 11500 177 65.12004 117.2 117.9 14108 194 72.62005 136.4 134.9 17443 210 82.92006 158.1 161.3 21707 258 84.22007 164.7 167.3 27759 347 79.92008 174.1 176.9 32746 402 81.52009 185.0 188.7 31733 338 93.92010 190.1 193.7 34142 330 103.52011 194.3 197.6 37976 346 109.72012 200.4 205.4 41377 366 113.12013 206.3 213.2 43932 388 113.22014 207.1 216.1 44530 380 117.32015 208.6 218.0 44432 368 120.72016 208.4 219.2 46097 374 123.1Source: Statistical Offi ce of the Republic of Serbia, Statistical Yearbook, 2003-2017.2  The exchange rate of the dinar is tied to the euro.                                                                                                                                                                                                12Collection of Papers - Faculty of Geography at the University of Belgrade 66 (1)Chain index was used in this paper, where the fi rst year of the observed period (2002) was taken as a basis to which changes in the years that followed were successively added. This method was used because it was better suited for cross-analysis and because it best shows the tendencies in the observed phe-nomenon. Table 1 shows a constant increase in prices in the hospitality industry of 108.4% in 2002-2016. The cross correlation analysis will show whether this is due to the harmonisation of prices with the euro exchange rate or a result of improved service quality.Consumer price indexThe consumer price index is a parameter that indicates changes in the prices of foodstuffs, consumer goods and services. It represents the amount of money needed to sustain a living, to satisfy existential needs. The cost of living increase may be an important factor in deciding whether to buy a tourist service because tourism is an auxiliary need and can be substituted easily with basic, existential needs. Thus, in addition to the analysis of hospitality industry prices, the impor-tant element of this paper is the analysis of the cost of living. Chain index was used in data processing, where the fi rst year in the analysed period (2002) was used as a basis to which the changes in the years that followed were successively added. Table 4 indicates constant increase in the cost of living, reaching 119.2% in 2002-2016, which was 10.8% higher than the increase in prices in the hospital-ity industry.Average salariesAverage salary indirectly speaks of the economic development of a coun-try, i.e. the purchasing power of its population. The data in Table 1 show that the salaries were growing slowly but constantly (400.6% in RSD), and that the dinar to euro exchange rate went up as well (103.1%) (Table 1). The question of the relativity of wage growth inevitably springs to mind as this is more about the nominal rather than the real wage growth. At the same time, wage growth is accompanied by the weakening of the dinar relative to the euro, resulting in a decrease rather than an increase in the purchasing power of the population. Salaries (expressed in euros) were growing from 2002 to 2008 (164.5 %), but they dropped by 17.9% in 2010, which was refl ected in the decrease in domestic tour-ist fl ow. Salaries increased by 146.1% in 2002-2016 - more than the euro exchange rate in the same period (103.1%). Euro exchange rateThe euro exchange rate refl ects the value of the domestic currency, indirect-ly indicates infl ation and is therefore the key corrective factor in this research.                                                                                                                                                                                                 13The Importance of Prices in Tourism Industry - The Impact of Growth of Prices of Hospitality Services on the Domestic Tourism DemandThe data in Table 1 show that the exchange rate for the dinar against the euro was constantly going up, reaching over 103.1% in the observed period (2002-2016), which is somewhat higher than the price growth in the hospitality indus-try in the same period (108.4%).The prices in the hospitality industry are corrected against the euro and they follow every increase in the euro exchange rate. The prices in the hospital-ity industry grew faster than the average euro exchange rate in the observed period due to faster growing input prices and constant infl ation. This is because a higher dinar exchange rate than the actual one is always calculated in the price in order to circumvent any sudden fl uctuations and prevent any loss of profi t from the sale of services in the hospitality industry.Domestic tourist fl owArrivals and nights spent are the most frequently observed indicators of tourism development in a country. It should be pointed out that nights spent is a much more complex information, which, more than the arrivals, refl ects the intensity of tourism in an area. However, since they are best observed com-paratively, they were both taken into consideration. The analysis of domestic arrivals and overnight stays of domestic tourists was particularly important for this paper because economic changes on the national level are in a direct cause-and-effect relationship with the domestic tourist fl ow and their spending. In addition, the objective of the research is to show which forms of tourism (when it comes to domestic tourists) are affected by the prices in the hospitality indus-try most. In this regard, the subject matter of this analysis is domestic arrivals and overnight stays of domestic tourists by tourist destination (towns/cities, mountains and spas), as recorded by the Statistical Offi ce of the Republic of Serbia. It is evident that the number of domestic tourists is in constant decline, rising mildly in 2007 and 2008 only to drop even more sharply immediately after (Table 2). In 2002-2014, domestic arrivals dropped by 38.7%, while overnight stays were slightly higher 39.3%. The drop in domestic arrivals and nights spent may have been caused by lower service quality or price growth in the hospital-ity industry and/or by a decline in the standard of living.  The fi rst of the three possible causes may be eliminated as the number of new and renovated 4-star and 5-star hotels is growing, as well as the number of apartments, hostels, camp-sites, increasing the diversity of offer3, as well as the number of foreign tourists 3  On the one hand, the increase in the number of rooms and bed places in Serbia is a result of the reconstruction and refurbishment of many existing establishments following their privatisation, which meant signifi cant investment in the buildings, the equipment and modern technology. On the other hand, new accommodation establishments have been opened e.g. hostels, special types of agritourism accommodation (salaši), etc. (Vukosav, Ćurčić, 2009).                                                                                                                                                                                                14Collection of Papers - Faculty of Geography at the University of Belgrade 66 (1)(310% for the period 2002-2016) and overnight stays of foreign tourists (271% for the period 2002-2016). (Statistical Offi ce of the Republic of Serbia, Statistical Yearbook, 2003-2017). We are left with the price growth and/or the drop in the standard of living in Serbia.Table 2. Domestic tourist arrivals and overnight stays (000)YearTourist arrivals Overnight staysTotal City Mountain Spa Total City Mountain Spa2002 1897.6 1116.8 411.0 312.1 6468.5 2152.2 2048.7 2093.62003 1658.7 965.2 355.4 290.9 5892.9 1918.8 1816.1 2008.62004 1579.9 873.2 373.5 285.5 5791.6 1856.4 1748.1 2031.12005 1535.8 820.2 379.4 285.6 5507.6 1724.5 1696.2 1947.52006 1537.6 807.8 366.2 302.2 5577.3 1664.3 1651.1 2113.32007 1610.5 776.5 409.5 359.1 5853.0 1639.3 1806.5 2243.52008 1619.7 793.1 409.0 343.1 5935.2 1685.7 1776.3 2266.82009 1373.4 693.0 349.8 334.2 5292.6 1334.3 1547.9 2189.62010 1317.9 653.9 334.3 319.9 4961.4 1311.6 1337.8 2106.32011 1304.4 552.1 355.1 341.6 5001.7 1219.5 1442.2 2176.62012 1269.7 610.8 348.7 310.1 4688.5 1341.6 1445.4 1901.52013 1270.7 601.5 338.3 350.3 4579.1 1446.4 1363.8 1953.32014 1163.5 593.9 301.7 323.6 3925.2 1327.5 1196.8 1650.92015 1304.9 646.9 366.8 348.5 4242.2 1437.1 1419.2 1623.82016 1472.2 655.7 425.8 391.1 4794.7 1328.9 1641.4 1831.2Source: Statistical Offi ce of the Republic of Serbia, Statistical Yearbook, 2003-2017.When it comes to tourist fl ow by type, a sharp drop in the number of domes-tic arrivals (46,8%) and overnights of domestic tourists (38.3%) in the so-called city tourism over the period 2002-2014 is evident. Mountain tourism, another form of tourist fl ow, is specifi c as it largely depends on the solvency of the clients enjoying it. They come from higher or high-paying strata of population who, in addition to paying for their accommodation package, have to be able to spend part of their discretionary income on sports equipment and complementary tour-ist services. It should be pointed out that complementary tourist services are very expensive in Serbian ski resorts considering the average wage in Serbia. A drop in the number of this type of tourists is not as pronounced (26.6%) as in city tour-ism but the number of overnight stays is (41.6%). This means that while domestic tourists continue to go to domestic ski resorts in somewhat smaller numbers, they tend to shorten their stay in the mountains from 5 to 4 days (Table 2).                                                                                                                                                                                                15The Importance of Prices in Tourism Industry - The Impact of Growth of Prices of Hospitality Services on the Domestic Tourism DemandA modest increase is recorded in domestic arrivals in Serbian spas (3.7%) and decrease in overnight stays of domestic tourists (19.4%) in the period (2002-2014). The distinct positive trends in spa tourism are partly due to better ser-vice quality and wider range of complementary tourist services (spas, wellness centres, aqua parks, swimming pools, sports courts/fi elds, entertainment, etc.), making the offer more attractive to wider consumer public rather than only to those who come to spas exlusively for medical treatment and/or healing. In this way, spas have considerably increased their tourism function. The year-to-year decline in the domestic tourist revenue initiated the ac-tions of the Government of the Republic of Serbia to take measures in order to stop the decline. In that sense, the Government launched the Gift Voucher programme to subsidize a domestic tourist with 5,000 RSD for spending the holidays in tourist destinations in Serbia. The programme had a positive im-pact since it increased the number of domestic tourists for 26.5%, the number of overnight stays for 22.2% in the period 2014-2016. According to the data of the Ministry of trade, tourism and telecommunications, 46,000 citizens used the vouchers to pay for a part of their holiday cost spent a tourist destination in Serbia and realized over 400,000 overnight stays in 2016. Perceiving the diffeer-ence between the year 2015 and 2016, it may be concluded that the increase is a direct consequence of the programme designed and realized by the Ministry and the Government. Observing the main segments of tourism turnover in Serbia, the incentive mainly infl uenced the increase in mountain tourism, where the number of tourists increased for 29.1%, and the number of overnight stays for 27.1%. signifi cant increase is perceived also in spa tourism with the increase of 17.3% in the number of tourist and 9.8% increase in the number of overnight stays. In urban tourism the increase of tourists was 9.4%, whereas the number of overnight stays remained unchanged. Multidimensional data analysisA simultaneous and comparative analysis of the factors researched in this paper, namely the prices in hospitality industry and the elements of tourism fl ow, should indicate how the prices in hospitality industry, as the main el-ement of a tourist product, infl uence  the fl ow of domestic tourists in Serbia. Considering that the economic situation in Serbia is unstable and that the value of the domestic currency is on a slow but constant decline, in addition to the fac-tors mentioned above, other parameters should be included corrective factors in the analysis as well, such as average salaries, consumer price indices and the euro exchange rate for the period 2002-2016.                                                                                                                                                                                                  16Collection of Papers - Faculty of Geography at the University of Belgrade 66 (1)Table 3. The most signifi cant correlation between the observed elementsNo. CorrelationThe correlation coeffi cient(r12)1 The index of prices of hospitality services / Number of tourists -0,853**2 The index of prices of hospitality services / Nights -0,851**3 Price Index cost of living / Number of tourists -0,848**4 Price Index cost of living / Nights -0.861**5 Average salaries / Number of tourists -0,704**6 Average salaries / Number of nights -0,676**7The index of prices of hospitality services / Cost of living price index 0,999**8 The index of prices of hospitality services / Average salaries 0,937**9 Price Index cost of living / Average salaries 0,923**10 The index of prices of hospitality services / Euro 0,944**11 Price Index cost of living / Euro 0,950**12 Euro / Average salaries 0,793**13 Euro / Number of tourists -0,874**14 Euro / Nights -0,935**15 The index of prices of hospitality services / Urban tourists -0,940**16 The index of prices of hospitality services / City Nights -0,927**17 The index of prices of hospitality services / Mountain tourists -0,34118 The index of prices of hospitality services / Mountain nights -0,820**19 The index of prices of hospitality services / Spa tourists 0,674**20 The index of prices of hospitality services / Spa nights 0,363**    Correlation signifi cant at 0,01 levelThe parameters shown in the chart indicate that, generally speaking, the number of domestic tourists is falling whilst the prices in the hospitality indus-try and the cost of living are growing, all converging in 2007/2008, whilst the euro to dinar exchange rate and average salaries are showing somewhat dif-ferent tendencies. However, more substantial conclusions cannot be based on charts alone, rendering it necessary to resort to the correlation analysis of the selected data.  Table 3 shows the strength of correlations between the elements that have been selected for the purpose of this research as the most important and most infl  uential ones, rendering it necessary to resort to the correlation anal-ysis of the selected data.                                                                                                                                                                                                17The Importance of Prices in Tourism Industry - The Impact of Growth of Prices of Hospitality Services on the Domestic Tourism DemandThe fi rst four correlations show that the growth in prices in the hospitality industry and the cost of living have a great impact (r12 = -0.853/-0.848 and r12 = -0.851/-0.861) on the number of domestic arrivals and the number of overnights of domestic tourists, and that the impact is inversely proportional and equally strong.The correlation between the average salaries in Serbia and the number of domestic arrivals and overnights is signifi cant (r12  = -0.704/-0.676), yet not par-ticularly strong. However, it is evident that a consumers salary or discretion-ary income has a bigger impact on the decision on the tourism trip than on the length of stay in a domestic tourist destination.Correlations 7-11 are very important as they indicate economic trends in Serbia in 2002-2011, which can have an indirect effect on the domestic tourism fl ow in Serbia. The increase in the cost of living and the increase in prices in the hospitality industry are strongly connected, parallel processes (r12= 0.999), so they cannot be observed separately. Correlations 8 and 9 indicate much more clearly what the decrease in the domestic tourism fl ow in Serbia is essentially about. Average salaries in Serbia were better aligned with the growing cost of living than with the growing prices in the hospitality industry, which clear-ly indicates that tourism is an auxiliary need rather than a basic need of life. Therefore, price growth in the hospitality industry by 6.8 % (difference: r9-r8) is evidently more likely to infl uence consumers to making a negative decision about a tourism trip than the increase in the cost of living is. This is supported by the fact that the cost of living and the prices in the hospitality industry are equally well and very solidly aligned with the growing value of the euro (r12 = 0.910/0.915).Correlations 12, 13 and 14 are also interesting as they indicate that average salaries were aligned to the growing value of the euro (r12  = 0,793), but were still considerably higher when compared with the euro exchange rate, with the nominal average salary of 152 euros in 2002 and 374 euros in 2016, and that the increase in the euro exchange rate greatly infl uences the decrease in domestic arrivals (r12 = -0.874) and overnight stays of domestic tourists (r12 = -0.935).The correlation analysis gave interesting results regarding some individual forms of tourism fl ow singled out as important for the tourism in Serbia (city tourism, mountain tourism and spa tourism). Correlation 15 shows that the growth in prices in the hospitality industry has the greatest effect on the city tourism fl ow and almost as great an effect on the decrease in the number of do-mestic tourists (r12 = -0.940) as well as on the decrease in the number of overnight stays of domestic tourists in cities (r12 = -0.927). This means that city tourism is the most sensitive one and the most unstable one on the domestic tourist market. It is a known fact that city visits are very short, usually 1-2 days, that both city hotels and complementary tourist services in bigger towns and cities such as                                                                                                                                                                                                 18Collection of Papers - Faculty of Geography at the University of Belgrade 66 (1)Belgrade, Novi Sad, Niš and Kragujevac are much more expensive than in small towns. All this results in an easy abandonment of the idea of city tourism and taking it off the priority list in exchange for longer, annual trips.Going to the mountains makes a signifi cant group of annual trips for many skiing afi  cionados. Skiing is one of expensive sports and those practicing it come from higher paying social strata, spending more money than an average domes-tic tourist does elsewhere. The correlation shows that price trends in the hospi-tality industry do not have as much of an infl uence on deciding to go skiing (r12 = -0.341) as they do on the length of stay in a ski resort (r12 = -0.820). The latter classifi es as strong infl uence.Spa tourism in Serbia is specifi c as individuals (i.e. medical patients) who are referred to spas for treatment and/or rehabilitation by the Republic Health Insurance Fund are counted in the total number of arrivals. Their numbers are not negligible and they have a considerable impact on the results of this analy-sis, with positive and strong correlations 19 (r12 = 0.674) and weak correlation 20 (r12 = 0.363), whilst price growth in the hospitality industry has effect, caus-ing an increase in the number of domestic arrivals, but has not in the overnight stays of domestic tourists in Serbian spas, because of the infl uence of Republic Health Insurance Fund. This can be explained solely by the fact that state institu-tions fund the medical treatment, rehabilitation and stay of a signifi cant num-ber of patients in spas, having a positive effect on the strength of the observed correlation.ConslusionTaking into consideration all the elements analysed in this paper, it is evident that, in one way or another, they all infl uence domestic arrivals and overnights, i.e. a decision on tourism trip and on the length of stay at a tourist destination. However, prices in the hospitality industry, observed both directly and by analysing trends in average salaries, the cost of living and in the euro exchange rate in particular, are without a doubt strongly connected with the volume of tourism trips taken by domestic tourists. The prices in the hospitality industry and the cost of living have increased almost equally, by 108,1/119,2% in 2002-2014, the value of the euro around 103,1% and the salaries expressed in euros by 146,1%, meaning that the prices in the hospitality industry grow faster than the euro exchange rate by 5,3%. Using the same parameters, we can say that salaries were growing faster than both the euro (43%) and the prices in the hospitality industry (37,7%), which should mean that the purchasing power of the Serbian population is growing. However, it is evident from the continuous drop in domestic arrivals and overnight stays of domestic tourists that the real                                                                                                                                                                                                 19The Importance of Prices in Tourism Industry - The Impact of Growth of Prices of Hospitality Services on the Domestic Tourism Demandpurchasing power of the population is on the decline and that the budget allo-cated for tourism is shrinking. This conclusion is based on correlations 13 and 14, clearly showing that around 79,3% of the correlation can be explained by the fact that the drop in domestic arrivals and 93,5% in overnights in Serbia is due to the euro exchange rate going up. Since the prices in the hospitality industry were growing faster than the exchange rate for the euro by 5,3%, and the pur-chasing power was in decline despite the nominal increase in salaries, it is obvi-ous that price trends in the hospitality services have a signifi cant impact (85,3%) on domestic tourists deciding whether to take a tourism trip and how long they will stay at their destinations in Serbia. The impact of prices on the domestic tourism turnover is visible in the Gift Voucher programme of the Government of the Republic of Serbia and the Ministry of trade, tourism and telecommunications at the domestic tourism market. The institutions practically impacted the decrease of the average price of tourism services by giving subvention of 5,000 RSD per a domestic tourist for spending the holidays in tourist destinations in Serbia. It had a quick positive impact on domestic tourism revenue of 26.5% (arrivals) and 22.2% (overnight stays).ReferencesBakić, O. (2000). Marketing u turizmu, Ekonomski fakultet: Beograd. Bošković, D., Težak, A., & Saftić, D. (2010). Media In Collecting Information On Tourism Destinations And Sociodemographic Characteristics. Ekonomska istraživanja, 23(3), 111-120. Crouch, G. (1992). Effect of income and price on international tourism, Annals of Tourism Research, 19(4), 643-664.Djeri, L., Armenski, T., Jovanović, T., & Dragin, A. (2014). How income infl uences the choice of tourism destination. Acta Oeconomica, 64 (2), 219-237.Durbarry,  R.,  &  Sinclair,  M.  T.  (2003).  Market  shares  analysis:  The  case  of  French  tourism  demand. Annals of Tourism Research, 30(4), 927-941.Dwyer, L., Forsyth, P., & Rao, P. (2000). The price competitiveness of travel and tourism: a comparison of 19 destinations. Tourism Management, 21, 9-22.Fateme Tohidy, A. (2011). Economic Impacts of Tourism Industry. International Journal of Business and Management, 6(8), 206-215.Forsyth, P. J., & Dwyer, L. (2009). Tourism price competitiveness. In J. Blanke, & Chiesa, T. (Eds.), The Travel and Tourism Competitiveness Report 2009: Managing in a Time of Turbulence (pp. 77 - 90). Geneva Switzerland: World Economic Forum.                                                                                                                                                                                                20Collection of Papers - Faculty of Geography at the University of Belgrade 66 (1)Granovetter, M. (2005). The Impact of Social Structure on Economic Outcomest. Journal of Economic Perspectives, Vol. 19(1), 33-50.Greenidge, K. (2001). FORECASTING TOURISM DEMAND An STM Approach. Annals of Tourism Research, 28(1), 98-112.Hanafi ah, H., & Harun, F. (2010). Tourism Demand in Malaysia: A cross-sectional pool time-series analysis, International Journal of Trade, Economics and Finance, 1(1), 80-83.Hung, W., Shang, J., & Wang, F. (2010). Pricing determinants in the hotel industry: Quantile regression analysis. International Journal of Hospitality Management, 29(3), 378384.Kosar, Lj. (2002). Hotelijerstvo  teorija i praksa. Viša hotelijerska škola: Beograd.Косар,  Љ. (2012). Хотелијерство I. Висока хотелијерска школа струковних студија: БеоградKotler, P., Bowen, J., & Makens, J. (2005). Marketing for Hospitality and Tourism. Prentice-Hall, Upper Saddle River: New York.Mangion, M.L., Durbarry, R., & Sinclair, T. (2005). Tourism competitiveness: price and quality Tourism competitiveness: price and quality. Tourism Economics, 11(1), 45-68.Mazanec, J., Wöber, K., & Zins, A. (2007). Tourism Destination Competitiveness: From Defi nition to Explanation? Journal of Travel Research, 46(1), 86-95.Morley, C. (1994). The use of CPI for tourism prices in demand modelling. Tourism Management, 15(5), 342-346. Rowley, J. (1997). Principles of price and pricing policy for the information marketplace. Library Review, 46(3), 179-189.Schmidgall, R.S. (1997). Hospitality Industry Managerial Accounting. Educational Institute, American Hotel & Motel Association, Lansing: MI.Shoemaker, S., Lewis, R., & Yesawich, P. (2006). Marketing Leadership in Hospitality and Tourism. Prentice-Hall, Upper Saddle River: New York.Statistički godišnjak Republike Srbije, 2003-2017, Republički zavod za statistiku: Beograd.Stojković, M. (2008). Statistički metodi u turizmu. Prirodno-matematički fakultet, Departman za geografi ju, turizam i hotelijerstvo: Novi Sad.Tkal ec, M., & Vizek, M. (2016), The price tag of tourism: does tourism activity increase the prices of goods and services?, Tourism Economics, 22 (1), 93-109.Tse, R. (2001). Estimating the Impact of Economic Factors on Tourism: Evidence from Hong Kong, Tourism Economics, 7(3), 277-293.Vukosav, S., & Ćurčić, N. (2009). Promene u hotelijerstvu Vojvodine kao rezultat tranzicionih procesa. Zbornik radova Geografskog insituta Jovan Cvijić SANU, 59(1), 111-126.                                                                                                Content uploaded by Svetlana VukosavAuthor contentAll content in this area was uploaded by Svetlana Vukosav on Feb 10, 2022 Content may be subject to copyright.... discussed time-series approaches for Icelandic tourism on fractional integration. Gara ca et al. (2018) used a correlation matrix for Serbia. Sainaghi et al. (2019) found that events have an important influence on hotel demand.  ...... We might conclude that foreign overnight stays cause increases in overnight prices in Slovenia, whilst alternatively domestic overnight stays do not. This finding does not mean dual pricing rules where, unlike domestic tourists, foreign tourists are willing to pay substantially higher prices than the current single prices because of the substantial consumer surplus (Gara ca et al., 2018).  ...Prices of short-stay accommodation: time series of a eurozone countryArticle

  • Aug 2019
  • Int J Contemp Hospit Manag
Sergej Gričar

Sergej Gričar

Stefan Bojnec

Stefan BojnecPurpose This paper aims to provide a reliable statistical model for time-series prices of short-stay accommodation and overnight stays in a eurozone country. Design/methodology/approach Exploiting the unit root feature, the cointegrated vector autoregressive model solves the problem of misspecification. Subsequently, variables are modelled for a long-run equilibrium with included deterministic variables. Findings The empirical results confirmed that overnight stays for foreign tourists were positively associated with the prices of short-stay accommodation. Research limitations/implications The major limitation lies in the data vector and its time horizon; its extension could provide a more specific view. Practical implications Findings can assist practitioners and hotel executives by providing the information and rationale for adopting seasonal volatility pricing. Structural breaks in price time-series have practical implications for setting seasonal-pricing schemes. Tourists could benefit either from greater price stability or from differentiated seasonal prices, which are important in the promotion of the price attractiveness of the tourist destination. Originality/value The originality of the paper lies in the applied unit root econometrics for tourism price time-series modelling and the prediction of short-stay accommodation prices.ViewShow abstract... As argued by Nicolau and Má s (2007) [16], an individual would optimise purchase decision according to product price and available budget. Camilleri (2019) [17] agreed that many tourists travel on a budget and hence, may only consider accommodation that is affordable to them or within their price range. He also pointed out the impact of lower prices for holidays to particular destinations on the increase in the number of travelers and observed tourist behaviour of booking well in advance of their travel dates to enjoy significant reduction in travel costs especially among frugal tourists (Ibid).  ...Factors Influencing Domestic Tourist Preference of Holiday Destination in Malaysia During the Covid-19 Pandemic: A Conceptual FrameworkArticleFull-text available

  • Jul 2021
Chareen Loh

Chareen Loh

Kamal Abdul Razak

Kamal Abdul RazakThe COVID-19 global pandemic has negatively impacted local tourism industries worldwide, including in Malaysia where the tourism industry contributes significantly to the country's economic income and employment opportunities. While sector has received regulatory financial assistance to sustain their business and retain employees, more market measures are needed to promote domestic tourism as the main vehicle for filling the tourist income gap from the decline in inbound international tourist arrivals. Similar previous studies were focused on business-as-usual conditions with unrestricted international travel, however there is a research gap focusing on tourism in Malaysia under current conditions of recovery from the impact of the COVID-19 pandemic. The purpose of this paper is to propose a conceptual framework to investigate affordability, quality of service, health and safety compliance and access to facilities and amenities and to better understand how these factors influence domestic tourist preference of holiday destination in Malaysia during the pandemic. A sample of 384 respondents from the Federal Territories of Kuala Lumpur and Putrajaya and the state of Selangor in Malaysia will be selected by using random sampling technique. Regression analysis will be conducted to assess the research hypothesis.ViewShow abstractImpacts of quality certification on online reviews and pricing strategies in the hospitality industryArticle

  • Feb 2021
  • Int J Hospit Manag
Ian Sutherland

Ian Sutherland

  • Youngseok Sim
Seul Ki Lee

Seul Ki LeeCertification of firm quality is an important strategic concern for industry practitioners, since it entails explicit and implicit investments in time, personnel training and finances. Since the impact of certification influences customers in various ways, the purpose of this study is to determine what impact quality certification has on both online reputation and price premiums. This study extends the scope of extant literature by including various types of accommodations beyond typical hotels. Two-stage least squares (2SLS) is applied revealing an increase in online ratings for accommodations after certification relative to before, supporting that quality certifications may improve online ratings. Using spatial two-stage least squares (S2SLS), this study demonstrates significantly higher valence in online ratings for certified relative to non-certified accommodations, as well as showing a price premium in certified over non-certified accommodations.ViewShow abstractMarketing for Hospitality and TourismBookFull-text available

  • Jan 2017
Philip Kotler

Philip Kotler

John T. Bowen

John T. Bowen

  • James Makens
Seyhmus Baloglu

Seyhmus BalogluViewTourism Demand in Malaysia: A cross-sectional pool time-series analysisArticleFull-text available

  • Jan 2010
Mohd Hafiz Hanafiah

Mohd Hafiz Hanafiah

  • Mohd HarunViewMarketing for Hospitality and TourismBookFull-text available
  • Jan 2014
Philip Kotler

Philip Kotler

John T. Bowen

John T. Bowen

  • James MakensViewTourism Price CompetitivenessArticleFull-text available
  • Jan 2009
Peter Forsyth

Peter Forsyth

Larry Dwyer

Larry DwyerPrice competitiveness is an essential component in the overall tourism competitiveness of a country or a desti-nation.There is widely accepted evidence that prices are one of the most important factors in decisions about whether, and where, to undertake trips.This is reflected in the Travel &Tourism Competitiveness Index (TTCI), where, in pillar 10, price competitiveness is assessed using four sets of hard dataon ticket taxes and airport charges (indicator 10.01), national purchasing power parity prices (10.03), fuel price levels (10.04), and the hotel price index (10.05). Not surprisingly given its importance, many have developed or used indicators of tourism price competi-tiveness.These indicators vary considerably. It is possible to find indicators based on detailed prices that tourists pay in different countries, along with some highly aggregated and proxy measures. Different indicators shed light on different aspects of competitiveness, and the measures that are most useful for a purpose depend on what questions are being explored. Some of the key aspects that affect which indicators should be used are:  The need for accuracy and tourism-specific detail versus timeliness. More detailed and accurate meas-ures involve more data collection and processing, and thus they take longer to produce. If timeliness is of essence, it may be necessary to rely on broader proxies that can be obtained readily for price com-petitiveness.  The need for cross-country (or cross-destination) comparisons of the prices tourists are actually paying. If cross-country comparisons of tourism competitiveness at a particular point of time are required, it is necessary to obtain data on the prices of tourism goods and services in different countries. There are relatively few sources of these data, and they tend to appear with a lag.ViewShow abstractHow income influences the choice of tourism destination?ArticleFull-text available

  • Jun 2014
Lukrecija Djeri

Lukrecija Djeri

Tanja Armenski

Tanja Armenski

Tamara Jovanovic

Tamara Jovanovic

Aleksandra Dragin

Aleksandra DraginThis paper tries to contribute to the literature that covers the issues of the decision-making process when choosing a tourism destination by conducting a survey among the inhabitants of the Backa region (province of Vojvodina in the Republic of Serbia). Following the information-processing theory, the decision-making process is defined with the five phases: need awareness, information search, estimation of alternatives, purchase, and purchase evaluation. 252 respondents took part in the research. Multivariate analysis (MANOVA) and discriminative analysis were used in the statistical procedure of data analysis. The results show that the level of income does not affect the first phase of need awareness, but strongly affects all the other phases of the decision-making process. The researchers also managed to address the most sensitive and vulnerable indicators of the decision-making process. Finally, comprehensive management implications for practitioners are dis-cussed.ViewShow abstractThe Price Competitiveness of Travel and Tourism: A Comparison of 19 DestinationsArticleFull-text available

  • Feb 2000
  • TOURISM MANAGE
Larry Dwyer

Larry Dwyer

Peter Forsyth

Peter Forsyth

D.S. Prasada Rao

D.S. Prasada RaoThis paper presents findings and conclusions from an examination of the price competitiveness of 19 tourism destinations. Using Australia as a base country, the paper compares the prices of a bundle of tourist goods and services in a range of competing destinations, through the development of indices of international price competitiveness. Two major categories of prices are distinguished  those relating to travel to and from a destination (travel cost) and those relating to prices within the tourism destination (ground cost).ViewShow abstractTourism Destination Competitiveness: From Definition to Explanation?ArticleFull-text available

  • Aug 2007
  • J Trav Res
Josef A. Mazanec

Josef A. Mazanec

  • Karl  W. Wober
Andreas H. Zins

Andreas H. ZinsThis article contributes to the recent literature on tourism destination competitiveness including the gargantuan compilations of competitiveness factors by Ritchie and Crouch (2003), or Dwyer and Kim (2003), and, particularly, the widely known prototype of a Competitiveness Monitor (CM) initiated by the World Travel and Tourism Council (WTTC). The central question underlying this article is whether an arrangement of data such as the CM can be transformed from a purely definitional system into an explanatory model. A number of criticisms regarding the way of constructing the CM, its epistemological nature, and the absence of any accessibility factors lead to a moderately revised system that is explored by latent variable modeling. The empirical findings support this type of model, which tends to better explain the levels of tourism activity already achieved than sustained tourism growth. A discussion of the detailed results produces several recommendations on how to adjust the future strategy of research on destination competitiveness.ViewShow abstractThe Price Tag of Tourism: Does Tourism Activity Increase the Prices of Goods and Services?Article

  • Feb 2016
Marina Tkalec

Marina Tkalec

  • Maruška VizekThe authors use panel data models on a dataset covering EU new member states and candidate countries (Montenegro and Turkey) to investigate the relationship between tourism activity and price level. Along with modelling the overall price level, the authors also separately model the price level of consumer goods, of consumer services and of goods and services associated with tourism consumption (hotels and restaurants, recreation and culture, transportation and food and beverages). Thereby, they control for other factors that commonly influence the price level of an economy, such as income, productivity, trade openness and fiscal dominance. The results suggest that tourism activity increases the overall price level in the economy. This effect is, however, much stronger for prices of consumer services; in particular, for prices of recreation and culture, and hotels and restaurants.ViewShow abstractEconomic Impacts of Tourism IndustryArticle
  • Aug 2011
  • Fateme TohidyThis article is concerned with the economic impacts of tourism industry, especially in developing countries. It initially reviews the concept and using a model, it deals with the factors affecting the economic impacts associated with tourism. The research findings indicated that with short-term and long-term strategic planning and using the specific abilities and tourism products of developing countries, which suffer from some indices as unemployment, limits in earning and currency flows, inflation and other problems, most of their economic problems can be solved.ViewShow abstractMarket shares analysisArticle
  • Oct 2003
  • ANN TOURISM RES
Ramesh Durbarry

Ramesh Durbarry

  • M. Thea SinclairThis paper examines the magnitudes and determinants of changes in destinations shares of a major tourist origin market. The Almost Ideal Demand System model is used to quantify the responsiveness of French tourism demand in Italy, Spain, and the United Kingdom to changes in relative prices, exchange rates, tourists expenditure budget, and external events. The results indicate that effective price competitiveness is a key variable driving changes in market shares. Policymakers who wish to maintain their shares of the French market should pay particular attention to tourism pricing policies, as well as to improving the tourism offer.ViewShow abstractShow more

... discussed time-series approaches for Icelandic tourism on fractional integration. Gara ca et al. (2018) used a correlation matrix for Serbia. Sainaghi et al. (2019) found that events have an important influence on hotel demand.  ...... We might conclude that foreign overnight stays cause increases in overnight prices in Slovenia, whilst alternatively domestic overnight stays do not. This finding does not mean dual pricing rules where, unlike domestic tourists, foreign tourists are willing to pay substantially higher prices than the current single prices because of the substantial consumer surplus (Gara ca et al., 2018).  ...Prices of short-stay accommodation: time series of a eurozone countryArticle

  • Aug 2019
  • Int J Contemp Hospit Manag
Sergej Gričar

Sergej Gričar

Stefan Bojnec

Stefan BojnecPurpose This paper aims to provide a reliable statistical model for time-series prices of short-stay accommodation and overnight stays in a eurozone country. Design/methodology/approach Exploiting the unit root feature, the cointegrated vector autoregressive model solves the problem of misspecification. Subsequently, variables are modelled for a long-run equilibrium with included deterministic variables. Findings The empirical results confirmed that overnight stays for foreign tourists were positively associated with the prices of short-stay accommodation. Research limitations/implications The major limitation lies in the data vector and its time horizon; its extension could provide a more specific view. Practical implications Findings can assist practitioners and hotel executives by providing the information and rationale for adopting seasonal volatility pricing. Structural breaks in price time-series have practical implications for setting seasonal-pricing schemes. Tourists could benefit either from greater price stability or from differentiated seasonal prices, which are important in the promotion of the price attractiveness of the tourist destination. Originality/value The originality of the paper lies in the applied unit root econometrics for tourism price time-series modelling and the prediction of short-stay accommodation prices.ViewShow abstract... As argued by Nicolau and Má s (2007) [16], an individual would optimise purchase decision according to product price and available budget. Camilleri (2019) [17] agreed that many tourists travel on a budget and hence, may only consider accommodation that is affordable to them or within their price range. He also pointed out the impact of lower prices for holidays to particular destinations on the increase in the number of travelers and observed tourist behaviour of booking well in advance of their travel dates to enjoy significant reduction in travel costs especially among frugal tourists (Ibid).  ...Factors Influencing Domestic Tourist Preference of Holiday Destination in Malaysia During the Covid-19 Pandemic: A Conceptual FrameworkArticleFull-text available

  • Jul 2021
Chareen Loh

Chareen Loh

Kamal Abdul Razak

Kamal Abdul RazakThe COVID-19 global pandemic has negatively impacted local tourism industries worldwide, including in Malaysia where the tourism industry contributes significantly to the country's economic income and employment opportunities. While sector has received regulatory financial assistance to sustain their business and retain employees, more market measures are needed to promote domestic tourism as the main vehicle for filling the tourist income gap from the decline in inbound international tourist arrivals. Similar previous studies were focused on business-as-usual conditions with unrestricted international travel, however there is a research gap focusing on tourism in Malaysia under current conditions of recovery from the impact of the COVID-19 pandemic. The purpose of this paper is to propose a conceptual framework to investigate affordability, quality of service, health and safety compliance and access to facilities and amenities and to better understand how these factors influence domestic tourist preference of holiday destination in Malaysia during the pandemic. A sample of 384 respondents from the Federal Territories of Kuala Lumpur and Putrajaya and the state of Selangor in Malaysia will be selected by using random sampling technique. Regression analysis will be conducted to assess the research hypothesis.ViewShow abstractImpacts of quality certification on online reviews and pricing strategies in the hospitality industryArticle

  • Feb 2021
  • Int J Hospit Manag
Ian Sutherland

Ian Sutherland

  • Youngseok Sim
Seul Ki Lee

Seul Ki LeeCertification of firm quality is an important strategic concern for industry practitioners, since it entails explicit and implicit investments in time, personnel training and finances. Since the impact of certification influences customers in various ways, the purpose of this study is to determine what impact quality certification has on both online reputation and price premiums. This study extends the scope of extant literature by including various types of accommodations beyond typical hotels. Two-stage least squares (2SLS) is applied revealing an increase in online ratings for accommodations after certification relative to before, supporting that quality certifications may improve online ratings. Using spatial two-stage least squares (S2SLS), this study demonstrates significantly higher valence in online ratings for certified relative to non-certified accommodations, as well as showing a price premium in certified over non-certified accommodations.ViewShow abstractMarketing for Hospitality and TourismBookFull-text available

  • Jan 2017
Philip Kotler

Philip Kotler

John T. Bowen

John T. Bowen

  • James Makens
Seyhmus Baloglu

Seyhmus BalogluViewTourism Demand in Malaysia: A cross-sectional pool time-series analysisArticleFull-text available

  • Jan 2010
Mohd Hafiz Hanafiah

Mohd Hafiz Hanafiah

  • Mohd HarunViewMarketing for Hospitality and TourismBookFull-text available
  • Jan 2014
Philip Kotler

Philip Kotler

John T. Bowen

John T. Bowen

  • James MakensViewTourism Price CompetitivenessArticleFull-text available
  • Jan 2009
Peter Forsyth

Peter Forsyth

Larry Dwyer

Larry DwyerPrice competitiveness is an essential component in the overall tourism competitiveness of a country or a desti-nation.There is widely accepted evidence that prices are one of the most important factors in decisions about whether, and where, to undertake trips.This is reflected in the Travel &Tourism Competitiveness Index (TTCI), where, in pillar 10, price competitiveness is assessed using four sets of hard dataon ticket taxes and airport charges (indicator 10.01), national purchasing power parity prices (10.03), fuel price levels (10.04), and the hotel price index (10.05). Not surprisingly given its importance, many have developed or used indicators of tourism price competi-tiveness.These indicators vary considerably. It is possible to find indicators based on detailed prices that tourists pay in different countries, along with some highly aggregated and proxy measures. Different indicators shed light on different aspects of competitiveness, and the measures that are most useful for a purpose depend on what questions are being explored. Some of the key aspects that affect which indicators should be used are:  The need for accuracy and tourism-specific detail versus timeliness. More detailed and accurate meas-ures involve more data collection and processing, and thus they take longer to produce. If timeliness is of essence, it may be necessary to rely on broader proxies that can be obtained readily for price com-petitiveness.  The need for cross-country (or cross-destination) comparisons of the prices tourists are actually paying. If cross-country comparisons of tourism competitiveness at a particular point of time are required, it is necessary to obtain data on the prices of tourism goods and services in different countries. There are relatively few sources of these data, and they tend to appear with a lag.ViewShow abstractHow income influences the choice of tourism destination?ArticleFull-text available

  • Jun 2014
Lukrecija Djeri

Lukrecija Djeri

Tanja Armenski

Tanja Armenski

Tamara Jovanovic

Tamara Jovanovic

Aleksandra Dragin

Aleksandra DraginThis paper tries to contribute to the literature that covers the issues of the decision-making process when choosing a tourism destination by conducting a survey among the inhabitants of the Backa region (province of Vojvodina in the Republic of Serbia). Following the information-processing theory, the decision-making process is defined with the five phases: need awareness, information search, estimation of alternatives, purchase, and purchase evaluation. 252 respondents took part in the research. Multivariate analysis (MANOVA) and discriminative analysis were used in the statistical procedure of data analysis. The results show that the level of income does not affect the first phase of need awareness, but strongly affects all the other phases of the decision-making process. The researchers also managed to address the most sensitive and vulnerable indicators of the decision-making process. Finally, comprehensive management implications for practitioners are dis-cussed.ViewShow abstractThe Price Competitiveness of Travel and Tourism: A Comparison of 19 DestinationsArticleFull-text available

  • Feb 2000
  • TOURISM MANAGE
Larry Dwyer

Larry Dwyer

Peter Forsyth

Peter Forsyth

D.S. Prasada Rao

D.S. Prasada RaoThis paper presents findings and conclusions from an examination of the price competitiveness of 19 tourism destinations. Using Australia as a base country, the paper compares the prices of a bundle of tourist goods and services in a range of competing destinations, through the development of indices of international price competitiveness. Two major categories of prices are distinguished  those relating to travel to and from a destination (travel cost) and those relating to prices within the tourism destination (ground cost).ViewShow abstractTourism Destination Competitiveness: From Definition to Explanation?ArticleFull-text available

  • Aug 2007
  • J Trav Res
Josef A. Mazanec

Josef A. Mazanec

  • Karl  W. Wober
Andreas H. Zins

Andreas H. ZinsThis article contributes to the recent literature on tourism destination competitiveness including the gargantuan compilations of competitiveness factors by Ritchie and Crouch (2003), or Dwyer and Kim (2003), and, particularly, the widely known prototype of a Competitiveness Monitor (CM) initiated by the World Travel and Tourism Council (WTTC). The central question underlying this article is whether an arrangement of data such as the CM can be transformed from a purely definitional system into an explanatory model. A number of criticisms regarding the way of constructing the CM, its epistemological nature, and the absence of any accessibility factors lead to a moderately revised system that is explored by latent variable modeling. The empirical findings support this type of model, which tends to better explain the levels of tourism activity already achieved than sustained tourism growth. A discussion of the detailed results produces several recommendations on how to adjust the future strategy of research on destination competitiveness.ViewShow abstractThe Price Tag of Tourism: Does Tourism Activity Increase the Prices of Goods and Services?Article

  • Feb 2016
Marina Tkalec

Marina Tkalec

  • Maruška VizekThe authors use panel data models on a dataset covering EU new member states and candidate countries (Montenegro and Turkey) to investigate the relationship between tourism activity and price level. Along with modelling the overall price level, the authors also separately model the price level of consumer goods, of consumer services and of goods and services associated with tourism consumption (hotels and restaurants, recreation and culture, transportation and food and beverages). Thereby, they control for other factors that commonly influence the price level of an economy, such as income, productivity, trade openness and fiscal dominance. The results suggest that tourism activity increases the overall price level in the economy. This effect is, however, much stronger for prices of consumer services; in particular, for prices of recreation and culture, and hotels and restaurants.ViewShow abstractEconomic Impacts of Tourism IndustryArticle
  • Aug 2011
  • Fateme TohidyThis article is concerned with the economic impacts of tourism industry, especially in developing countries. It initially reviews the concept and using a model, it deals with the factors affecting the economic impacts associated with tourism. The research findings indicated that with short-term and long-term strategic planning and using the specific abilities and tourism products of developing countries, which suffer from some indices as unemployment, limits in earning and currency flows, inflation and other problems, most of their economic problems can be solved.ViewShow abstractMarket shares analysisArticle
  • Oct 2003
  • ANN TOURISM RES
Ramesh Durbarry

Ramesh Durbarry

  • M. Thea SinclairThis paper examines the magnitudes and determinants of changes in destinations shares of a major tourist origin market. The Almost Ideal Demand System model is used to quantify the responsiveness of French tourism demand in Italy, Spain, and the United Kingdom to changes in relative prices, exchange rates, tourists expenditure budget, and external events. The results indicate that effective price competitiveness is a key variable driving changes in market shares. Policymakers who wish to maintain their shares of the French market should pay particular attention to tourism pricing policies, as well as to improving the tourism offer.ViewShow abstractShow more

ArticleFull-text available

Nagrajevanje zaposlenih, notranje podjetništvo in rast storitvenih podjetij = Employee Compensation,...June 2010 · Management

  • Jasna Auer Antonˇ ci ˇc
  • Boštjan Antonˇ ci ˇThe article deals with employee compensation, corporate entrepreneurshipand growth of companies in service industries. Hypotheses aboutrelationships between compensation, corporate entrepreneurship andcompany growth are stated and empirically tested in the article. On thebasis of responses to the structured questionnaire on the sample ofSlovenian companies from service industries we collected ... [Show full abstract] data for empiricalquantitative analysis. Hypotheses were tested by using structuralequation modeling. The findings indicate positive relationshipsbetween employee compensation and corporate entrepreneurship, andcorporate entrepreneurship and company growth. Recommendationsfor companies in the service industries are also given.View full-textArticle

Peak-Load Versus Discriminatory Pricing: Evidence from the Golf IndustrySeptember 2011 · Review of Industrial Organization

  • Frank F. Limehouse
Michael T Maloney

Michael T Maloney

Kurt W. Rotthoff

Kurt W. RotthoffUsing a unique dataset on the golf industry we analyze the weekend premium in golf course fees. Since both peak-load pricing and price discrimination may be at play, we attempt to separate these two forms of pricing. We find that as competition increases there is a decrease in the weekend premium, which we attribute to price discrimination. Additionally, we find that resort courses and courses ... [Show full abstract] heavily dependent on tourism have less differential pricing, which we attribute to less peak demand and less peak-load pricing.Read moreArticle

Price as the main element of the marketing mix: Evidence from tourist demandJanuary 2013

  • S.K. VolkovThe article analyzes consumer behavior in the market for tourism services and reveals main factors (elements of the marketing complex) affecting consumer preferences. The author concludes the price is the main element of the marketing mix of a travel company competing for tourist preferences. Read moreArticle

Determinants of Price of Tourism Products and Services in Online Auctions

  • Alexander EybleBay, one of the most successful online marketplaces, is attracting an increasing amount of sellers of tourism products and services. Despite this fact, research focused on tourism and online auctions is quite limited. The scope of this work is to identify key determinants of price of hotel rooms in online auctions to provide sellers with valuable information in order to optimize their selling ... [Show full abstract] strategies and auction designs.Read more

ArticleFull-text available

Nagrajevanje zaposlenih, notranje podjetništvo in rast storitvenih podjetij = Employee Compensation,...June 2010 · Management

  • Jasna Auer Antonˇ ci ˇc
  • Boštjan Antonˇ ci ˇThe article deals with employee compensation, corporate entrepreneurshipand growth of companies in service industries. Hypotheses aboutrelationships between compensation, corporate entrepreneurship andcompany growth are stated and empirically tested in the article. On thebasis of responses to the structured questionnaire on the sample ofSlovenian companies from service industries we collected ... [Show full abstract] data for empiricalquantitative analysis. Hypotheses were tested by using structuralequation modeling. The findings indicate positive relationshipsbetween employee compensation and corporate entrepreneurship, andcorporate entrepreneurship and company growth. Recommendationsfor companies in the service industries are also given.View full-text

Article

Peak-Load Versus Discriminatory Pricing: Evidence from the Golf IndustrySeptember 2011 · Review of Industrial Organization

  • Frank F. Limehouse
Michael T Maloney

Michael T Maloney

Kurt W. Rotthoff

Kurt W. RotthoffUsing a unique dataset on the golf industry we analyze the weekend premium in golf course fees. Since both peak-load pricing and price discrimination may be at play, we attempt to separate these two forms of pricing. We find that as competition increases there is a decrease in the weekend premium, which we attribute to price discrimination. Additionally, we find that resort courses and courses ... [Show full abstract] heavily dependent on tourism have less differential pricing, which we attribute to less peak demand and less peak-load pricing.Read moreArticle

Price as the main element of the marketing mix: Evidence from tourist demandJanuary 2013

  • S.K. VolkovThe article analyzes consumer behavior in the market for tourism services and reveals main factors (elements of the marketing complex) affecting consumer preferences. The author concludes the price is the main element of the marketing mix of a travel company competing for tourist preferences. Read more

Article

Determinants of Price of Tourism Products and Services in Online Auctions

  • Alexander EybleBay, one of the most successful online marketplaces, is attracting an increasing amount of sellers of tourism products and services. Despite this fact, research focused on tourism and online auctions is quite limited. The scope of this work is to identify key determinants of price of hotel rooms in online auctions to provide sellers with valuable information in order to optimize their selling ... [Show full abstract] strategies and auction designs.Read more
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