Pricing on the European Mass Tourism Market: Tour Operators, Low Cost Carriers and Internet

Jaume Rossello () and Antoni Riera Font

No 2008/4, CRE Working Papers (Documents de treball del CRE) from Centre de Recerca Econòmica (UIB ·"Sa Nostra")

Abstract: The recent expansion of Low Cost Carriers (LCCs) and the increasing use of Internet are provoking a deep transformation in the marketing of the typical Mediterranean summer tourism product in Europe. Internet may significantly reduce intermediary costs by enabling the connection between accommodation and transport business and consumers. At the same time, a more flexible product can be created in contrast to the conventional rigid tourist package offered by traditional tour operators. This paper investigates differences in price level and price dispersion across off-line and on-line markets and across tour operators and new emerging Internet retailers -including LCCs- using microdata on travel & accommodation individual expenses of tourists in the Balearic Islands, one of the most representative mature Mediterranean resorts. On the basis of the hedonic regression model, results suggest that price of transport; accommodation and board offered on Internet are lower than those offered by others channels, whatever the quality and quantity. Additionally, results reveal how on-line and off-line markets differ in the indirect value attributed to different characteristics of the product showing market segmentation.

Keywords: Internet pricing; e-tail; hybrid retailers; intermediaries; tourist products; Mediterranean Sea. (search for similar items in EconPapers)
Pages: 18 pages
Date: 2008
New Economics Papers: this item is included in nep-com, nep-eec, nep-mkt and nep-tur
References: View references in EconPapers View complete reference list from CitEc
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Published in 'Documents de Treball CRE', 2008, pages 1-18

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