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Financial Implications of Seasonal Variability in Demand for Tourism Services (A Draft)

Clement Tisdell

No 243922, Economic Theory, Applications and Issues Working Papers from University of Queensland, School of Economics

Abstract: Using Jensen’s inequality (and its mathematical generalization), this contribution shows how increased seasonal (periodic) variability of demand for tourism services can increase the annual profit of a tourism enterprise and the producers’ surplus of a corresponding competitive segment of the tourism industry experiencing this increased variability. It identifies conditions which result in these effects being magnified and takes account of the fact that a tourism business’ supply of services is often subject to capacity utilization constraints. A novel feature is that allowance is made for the possibility that variations in the market demand for tourism services may alter the prices of factors of production.

Keywords: Demand and Price Analysis; Production Economics; Productivity Analysis (search for similar items in EconPapers)
Pages: 13
Date: 2016-08-15
New Economics Papers: this item is included in nep-tur
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uqseet:243922

DOI: 10.22004/ag.econ.243922

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