Tourism price normalities in two Adriatic east coast 'euro' countries

Sergej Gričar, Štefan Bojnec, Vesna Karadžić and Tamara Backović

Economic Research-Ekonomska Istraživanja, 2022, vol. 35, issue 1, 4865-4883

Abstract: This debut work offers a stunning look at real vs nominal prices that consider more than just inflation. The inadequate examination of hospitality price comparison is investigated between two non-neighbouring Adriatic east coast countries – Slovenia and Montenegro – using the euro. Hospitality prices are an essential indicator in hospitality markets, destination marketing and management planning. Using 73 monthly time-series data for the economic crisis period from December 2008 to December 2014, this period covers one shock in a series. One of the key managerial features of cointegrated spatial hospitality price spread was that Montenegro followed Slovenian hospitality prices. Hospitality prices in Montenegro and Slovenia tend to be weakly integrated into the long term and seasonally driven in the short term. In addition, the econometric experimentation has given a theoretical novelty for underpinned and undermined tourism economy modelling in normalities. This state-of-the-art econometric feature is included in a customary vector error correction model (VECM). Robust applied results recognise that hospitality prices in Montenegro are domestic driven and in Slovenia Eurozone driven. This finding is relevant for applied economics on obtaining a normally distributed price model. Its theoretical and managerial implications are vital for hospitality economics, marketing and tourism management.

Date: 2022
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DOI: 10.1080/1331677X.2021.2019078

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