|ognizant Communication Corporation|
VOLUME 14, NUMBER 3
Tourism Analysis, Vol. 14, pp. 255-265
1083-5423/09 $60.00 + .00
Copyright © 2009 Cognizant Comm. Corp.
Printed in the USA. All rights reserved.
Price Dispersion: An Empirical Analysis in the Tour Operating Industry
Joaquín Alegre and Maria Sard
Applied Economics Department, Balearic Islands University, Palma de Mallorca, Illes Balears, Spain
Price dispersion refers to the existence of a nondegenerated distribution of prices by the sellers of a product or service with similar features. Price dispersion is a clear reality in the tour operating market, although very little attention has been given to an analysis of this kind of dispersion and price oscillations in package holidays. In this article, the existence of inter- and intrafirm price dispersion and its persistence over time are analyzed. For the purpose of the analysis, a dataset of package holiday prices for the Balearic Islands is used from a sample of British and German tour operators. The results show the existence of persistent differences in the mean prices of tour operators and price distributions with different dispersions and shapes for tour operators and markets. Nevertheless these distributions are not static, showing a swift response to market demands. Although the article is presented as an empirical investigation, the results can be interpreted in the context of theoretical literature on price dispersion.
Key words: Price dispersion; Tour operating industry
Address correspondence to Maria Sard, Applied Economics Department, Balearic Islands University, Edificio Jovellanos-Campus UIB, Crta. Valldemossa Km. 7.5, 07122 Palma de Mallorca, Illes Balears, Spain. Tel: +34 971 172389; Fax: +34 971 172389; E-mail: email@example.com
Portuguese Tourism Segments in Latin America
Antónia Correia,1 Carlos Pestana Barros,2 and Metin Kozak3
1Faculty of Economics, University of
the Algarve, Faro, Portugal
2Instituto Superior de Economia e Gestão, Technical University of Lisbon, Lisbon, Portugal
3School of Tourism and Hospitality Management, Mugla University, Mugla, Turkey
The objective of this article is to describe segments of Portuguese holidaymakers traveling to Latin American destinations. A latent class logit model is used to identify segments of Portuguese tourists whose choices differ according to a mix of destination attributes, information gathered, previous experience, and individual socioeconomic characteristics. The model identifies three different segments characterized as nature repeat tourists, ethnic repeat tourists, and first-time tourists. These findings emphasize the importance of taking into account different choice behavior variables to segment the tourist market.
Key words: Segmentation; Consumer behavior; Portuguese tourists; Latin America choice; Latent class logit model
Address correspondence to Antónia Correia, Faculty of Economics, University of the Algarve, Campus de Gambelas, Faro, Portugal. Tel: +351289800920; Fax: +351289800920; E-mail: firstname.lastname@example.org
Economics of Domestic Tourism: A Study of Australian Demand for Tourism Goods and Services
School of Economics & Finance, Victoria University, Melbourne, Australia
This study analyzes the economic determinants of domestic demand for tourism goods and services by Australians in a preference-consistent utility maximization framework. A system of demand equations based on the almost ideal demand system, which incorporates seasonality, is estimated using tourist consumption data collected through quarterly national visitor surveys. The system consists of five commodity aggregates: accommodation, food, transportation, shopping, and entertainment. The estimated model obeys the basic postulates of consumer theory, homogeneity, and symmetry. The results indicate that demands are price inelastic while income elasticities varied significantly in magnitude across the commodity aggregates. It was also observed that the demands for the five commodity aggregates are complementary, implying that tourists' overall utility depends on the joint consumption of a bundle of goods and services. The observed price inelastic demand coupled with the apparent complementarity of demands across the consumption bundle may be reflective of the possibility that latent price sensitivity is associated with tourist demand.
Key words: Domestic tourism demand; Almost ideal demand system; Homogeneity and symmetry restrictions; Australian domestic tourism demand
Address correspondence to Sarath Divisekera, School of Economics & Finance, Victoria University, PO Box 14428, Melbourne 8001, Australia. Tel: +61 3 9919 1071; Fax: +61 3 9919 1064; E-mail: Sarath.Divisekera@vu.edu.au
Labor Conditions in the Spanish Hotels and Restaurants Industry
Melchor Fernández,1 Yolanda Pena-Boquete,1 and Xesús Pereira2
1Instituto de Estudios e Desenvolvento
(IDEGA), Universidade de Santiago de Compostela, Spain
2Sociedade de Imaxe e Promoción Turística de Galicia, S.A, Spain
The tourism and hotels and restaurants industries
fall within the service sector and employ many people with different skills
and capacities. As in other sectors, it is important to monitor employment
and working conditions in this sector. However, there has not been any
empirical systematic research into employment and wage conditions in the
Spanish hotels and restaurants sector, partly because of the complexity
and size of the sector. All studies that exist on salary levels in the
tourism industry emphasize the fact that the hotels and restaurants sector
is among the lowest paid business sectors and it employs a large proportion
of women and nonqualified labor. Such characteristics generate lower pay
and greater risk of gender discrimination. The aim of this article
is to analyze these two negative aspects of labor market conditions in the hotels and restaurants industry in Spain and to discuss regional differences comparing tourism regions and nontourism regions. We show that low-wage incidence in the hotels and restaurants industry disappears with the tourism development of the sector, that is, it is lower in the tourism regions. Nevertheless, gender discrimination does not depend on the tourism or nontourism characterization of regions.
Key words: Discrimination; Tourism; Working conditions; Wage differentials
Address correspondence to Yolanda Pena-Boquete, Chalet dos Catedráticos, 1. Avda. das Ciencias s/n. 15782, Santiago de comppostela, Spain. Tel: +34 981591166; Fax: +34 982599935; E-mail: email@example.com
Estimating the Economic Benefits From Outdoor Recreation on a Scenic Route: The Ponale Road
Sandra Notaro1 and Maria De Salvo2
1Department of Economics, University
of Trento, Trento, Italy
2Dipartimento di Scienze Economico-Agrarie ed Estimative, University of Catania, Catania, Italy
The Ponale Road features a spectacular panorama, consisting of one of the most beautiful mountain-top views of Lake Garda (northern Italy). In the past, it attracted large numbers of tourists from all over Europe, especially mountain bikers, due to its unique characteristics. However, it was closed at the end of the 1990s due to geological instability. In this study, we estimated the social benefit of the reopening of this scenic route using the contingent valuation method, focusing exclusively on its recreational use value. During 2002, we conducted face-to-face interviews with 675 randomly drawn potential users of the road and got a response rate of 96%. Our target population was all potential road users, both tourists and residents, because at the time the research was carried out the road was closed to any type of use. A hypothetical scenario proposed the reopening of the road conditional on users paying an access fee. We elicited willingness to pay (WTP) using a payment-card format. The Cameron and Huppert parametric interval regression method was used to analyze data. Benefits compared with annual cost of maintenance show the attractiveness of the project. The feasibility of a pricing policy was also evaluated.
Key words: Social economic benefits; Recreational use value; Contingent valuation; Cameron and Huppert model
Address correspondence to Sandra Notaro, Department of Economics, University of Trento, Via Inama, 5 I-38122, Trento, Italy. Tel: 39 0461 882158; Fax: 39 0461 882222; E-mail: firstname.lastname@example.org
A Framework to Analyze Productivity Changes: Theoretical Aspects and Application to the Portuguese Travel Agencies Sector
Carlos Pestana Barros,1 Laurent Botti,2,3 and Nicolas Peypoch2,4
1ISEG, Technical University of Lisbon,
2Institut d'Administration des Entreprises, Université de Perpignan, Perpignan, France
3Institut des Sciences de l'Entreprise de Montpellier, Université Montpellier I, Montpellier, France
4Faculté des Sciences Exactes et Expérimentales, Université de Perpignan, Perpignan, France
This article proposes a new framework for analyzing decision-making unit (DMU) productivity changes during two time periods. This method is based on the Luenberger productivity indicator, which uses the directional distance function. The method has two advantages, which are explained in the article. First, it evaluates simultaneously the scale of the economies and the improvements in production that have been achieved by each observed entity during the time span. Thus, it can be considered as a method that indicates the performance evolution of DMUs. Moreover, it indicates technical efficiency and technological changes during the period. This framework is applied to a Portuguese travel agencies sample that has faced a number of threats during the period 2000-2004. Conclusions are that productivity increased for the majority of the travel agencies analyzed and that these good performances are almost always explained by technical progress. Some managerial implications beneficial for agencies' productivity are drawn from this study.
Key words: Portugal; Travel agencies; Benchmarking; Productivity; Directional distance function; Luenberger productivity indicator
Address correspondence to Laurent Botti, Université de Perpignan, Via Domitia, Faculté STHI, 52 Avenue Paul Aduy, 66 860, Perpignan, France. Tel: +33-468662264; Fax: +33-468662264; E-mail: Laurent.email@example.com
The Economic Impact of Hawaii's Cruise Industry
Stephen Pratt1 and Adam Blake2
1School of Tourism & Hospitality
Management, University of the South Pacific, Suva, Fiji Islands
2School of Services Management, Bournemouth University, Dorset, UK
The cruise industry worldwide has increased rapidly since the beginning of the millennium. Hawaii is no exception to this. Since the 1970s, cruise ships periodically visited the Hawaiian Islands, yet overnight cruising among the islands was rare. From 2001 to 2004, cruise ships sailing to and around Hawaii were solely foreign-flagged ships, including those home based in Hawaii. This meant much of the tourism revenue and taxes did not accrue to the local economy. Since July 2004, in addition to the foreign-flagged ships, a U.S.-flagged ship has been home-ported in the islands, paying Hawaii taxes and hiring U.S. crews with two more U.S.-flagged ships being added to the fleet in 2005 and 2006. This article uses a computable general equilibrium (CGE) model to estimate the economywide economic impact of the cruise industry on the state of Hawaii. Using the 2002 intercounty input-output table as a benchmark, the multiregion CGE model takes the direct expenditure estimates of cruise passengers, expenditure by cruise crews, and the direct expenditures by the cruise lines, as computed by the State of Hawaii and uses these direct impacts as simulations in the CGE model. Gross value added and welfare are calculated for each county and the state as a whole. Some regions benefit more than others.
Key words: Economic impacts; Cruise industry; Regional tourism; Hawaii
Address correspondence to Stephen Pratt, Lecturer, School of Tourism & Hospitality Management, University of the South Pacific, Private Mail Bag, Suva, Fiji Islands. Tel: +679 323 2815; Fax: +679 323 1510; E-mail: firstname.lastname@example.org
International Tourism in the Coastal Regions of Five Mediterranean Countries
Regional Economic Analysis and Research Division, Bank of Italy, Bologna, Italy
This article aims to highlight both some of the determinants of foreign tourist demand and the main structural features of coastal regions in Italy, Spain, Greece, Croatia, and Cyprus over the period 1999-2004. The analysis is carried out on the basis of an original three-dimensional panel dataset featuring a wide range of variables collected from a large set of sources. Weighted price competitiveness indicators are also calculated with weights built so as to contemporaneously account for the relative importance, for each region of destination, of both its foreign tourist markets and of its rival regions. Descriptive analysis shows that foreign tourists' hotel arrivals and night stays increased in Adriatic Croatia, entailing a rise in its market shares. In other regions, tourist flows either stagnated or declined, owing to the decrease in the number of travelers from Germany, one of the two main tourist markets for the Mediterranean countries. Italy's coastal regions performed below their potential, succeeding in attracting tourists mainly for the local art and historic heritage sites rather than for their "sea-and-sun" attractions. They could only partially reap the benefits of increased air passenger traffic, and their market shares did not increase despite price competiveness gains. Panel data regressions with fixed nationality, regional, and time effects show that international tourist flows to coastal regions are negatively correlated with price indicators and with the distance between coastal regions and tourists' homelands. Tourist movements are instead positively correlated with the country of origin's per capita GDP, the presence of renowned heritage or natural sites, and the international air passenger traffic at local airports. Policy interventions that foster structural improvements, such as the accessibility by air from abroad, may improve the qualitative competitiveness of the coastal regions.
Key words: International tourist demand; Mediterranean coastal regions; Price competitiveness indicators; Three-dimensional fixed-effects panel regressions
Address correspondence to Fabio Quintiliani, Bank of Italy, Piazza Cavour 6, I - 40124, Bologna, Italy. Tel: 139 051 6430172; Fax: 139 051 263925; E-mail: email@example.com
The Determinants of Tourism Demand in South Africa Using a Dynamic Panel Data Approach
Ramesh Durbarry,1 J. F. Nicolas,2 and Boopen Seetanah3
1Department of Tourism, Leisure and
Sport, University of Bedfordshire, Bedford, UK
2Faculty of Social Studies and Humanities, University of Mauritius, Reduit, Republic of Mauritius
3Faculty of Law and Management, University of Mauritius, Reduit, Republic of Mauritius
This article models inbound tourism demand for South Africa using a theoretical framework that is based on the gravity model and provides elasticity estimates that are useful for policy purposes. It uses a well-established gravity model following Anderson and van Wincoop's model (2003) to explain tourism flows. The article departs from most of the existing work estimating tourism demand and builds on the recent work of Durbarry, but employs a dynamic panel data setting. The results show that tourists are not too sensitive to changes in the tourism price of South Africa, indicating that it offers a unique product and experience to tourists. In fact, evidence tends to suggest that competing destinations may imploy tourism products that are unique to their destinations in the region. The level of development and tourism infrastructure also affect arrivals. It is also found that distance negatively affects arrivals, but common border and language play an important role. The dynamic model supports the presence of repeat tourism and positive word-of mouth, particularly from European and American origins.
Key words: Tourism demand; Dynamic panel data; South Africa
Address correspondence to Nicolas Ragodoo, Faculty of Social Studies and Humanities, University of Mauritius, Reduit, Republic of Mauritius. Tel: +230 454 10 41; Fax: +230 234 62 69; E-mail: firstname.lastname@example.org
Is Environmental Regulation Harmful for Competitiveness? The Applicability of the Porter Hypothesis to Tourism
Maria Razumova, Javier Lozano, and Javier Rey-Maquieira
Department of Applied Economics, University of the Balearic Islands, Palma de Mallorca, Baleares, Spain
The importance of environmental quality for tourism industries can hardly be overestimated. However, high environmental quality often requires public intervention, which can lead to an increased cost burden and, eventually, to a loss of competitiveness. The Porter hypothesis (PH) proposes a mechanism to make this trade-off less grim or to even avoid it. The assertions of the PH have been tested thoroughly for the manufacturing sectors; however, in the service sectors and, more specifically, in the tourism sector, the applicability of the mechanism proposed by the PH has so far not been explored in its full formulation. At the same time, due to the very distinct nature of the tourism product, the findings of works focused on different sectors cannot be applied in a straightforward manner to the tourism sector. The aim of this article is to take a look at the relationship between environmental quality and tourism competitiveness from the perspective of the PH.
Key words: Porter hypothesis; Tourism competitiveness; Environmental regulation; Environmental quality
Address correspondence to Javier Lozano, Department of Applied Economics, University of the Balearic Islands, Ctra Valldemossa km. 7.5, 07122 Palma de Mallorca, Baleares, Spain. Tel: +34 971172786; Fax: +34 971172389; E-mail: email@example.com
Economic Contribution of Tourism in Kenya
Elisabeth Valle1 and Mark Nelson Yobesia2
1Applied Economics Department, University
of the Balearic Islands, Palma de Mallorca, Baleares, Spain
2Tourism Facilities Development Officer, Kenya Wildlife Service, Nairobi, Kenya
As in many other developing countries, tourism is one of the key drivers of Kenya's socioeconomic development. At independence in 1963, Kenya depended mainly on its exports of agricultural products such as coffee and tea for foreign exchange. However, with the decline in world market prices of these primary products, the country has turned to tourism as an alternative. In spite of the growing importance of tourism as a key industry, little information is available on the holistic economic impacts and the pathways through which these impacts are affected in the Kenyan economy. Without information on how tourism as a complex industry is linked to the other sectors of the economy, policy makers will be at a loss on how to effectively stimulate its growth, develop capacity, and enhance its positive impacts. This research proposes to use data from the Kenya Social Accounting Matrix (SAM) 2001 to examine the impact of tourism on production, value added, and employment. From the complete SAM model, whose exogenous components include government, international trade, and saving-investment accounts, you need 9.63% of total production, 6.70% of employment, and 10.57% of value added to satisfy the export for other private services. These results indicate that the private services sector in general and tourism in particular is an important economic activity with potential to play an even bigger role in spurring output, incomes, and creating employment. The enhancement of the tourism sector's backward linkages with the extractive sectors, equipping manpower with skills required for better employment positions, increasing the share of local ownership in the service sector, and the diversification of tourism attractions would be helpful policies to leverage tourism's potential.
Key words: Social accounting models; Tourism contribution
Address correspondence to Elisabeth Valle, Applied Economics Department, Edificio Jovellanos, University of the Balearic Islands, Crtra de Valldemossa, km 7,5, CP 07122, Palma de Mallorca, Baleares, Spain. Tel: 34 971 17 13 25; Fax: 34 971 17 23 89; E-mail: firstname.lastname@example.org