A model of destination image formation

Image has been shown to be an important influence in the selection of vacation destinations. A model that represents the important determinants of destination image formation was developed based on previous studies in a number of fields. The research reported in this article presents the results of an empirical test of the model using path analysis. A major finding of the study was that a destination image is formed by both stimulus factors and tourists' characteristics. The results of this investigation provide important implications for strategic image management and can aid in designing and implementing marketing programs for creating and enhancing tourism destination images.     

Differential multipliers

A modified version of the Archer tourism multiplier model is used to derive differential multipliers, at both the sectoral and firm scale, for the Cook Islands tourist industry and ancillary sectors. Firm level analysis is shown to be necessary if factors of industrial organization, such as size and ownership characteristics, are not to be overlooked. The results reveal that smaller, locally owned establishments generate more local income, employment, and gross government revenue than their larger, overseas controlled counterparts. The model is shown to be a highly suitable surrogate for conventional input-output models, which, due to factors such as cost and lack of data, cannot always be used in small nations or regions to develop a data base suitable for the planning of tourist development.     

A stochastic cost efficiency analysis of international tourist hotels in Taiwan

The one-stage stochastic frontier approach (SFA) is used in this study to simultaneously estimate cost efficiency scores and factors of cost inefficiency for 66 international tourist hotels in Taiwan during 1997–2006. An SFA model with three outputs and three inputs is defined. The three outputs are room revenue, food and beverage revenue, and other operation revenue while the three inputs are price of labor, price of other operation, and price of food and beverage. This model also takes into account five environmental variables, including dummy variable of the hotels located in non-metropolitan area, dummy variable of chain hotels, the number of tourist guides, the minimum distance from each hotel to Taoyuan international airport and the minimum distance from each hotel to Kaohsiung international airport. Empirical results show that international tourist hotels in Taiwan are on average operating at 91.15% cost efficiency. All nominal variables are transformed into real variables in 1997 prices by GDP deflators. Chain systems, tourist guides, and international transportation can significantly improve the cost efficiency of international tourist hotels in Taiwan.     

MARKET POSITIONING ANALYSIS: A Hybrid Approach

This research introduces a hybrid approach including correspondence analysis and logit modeling to contrast the relative market position of Virginia with eight other eastern US states and the District of Columbia. The data obtained from a series of telephone surveys are analyzed. In a competitive analysis, the study areas are described by youth/mature and culture/nature dimensions relating to activity images as well as by beach/mountain and urban/country dimensions in connection with attraction images. Pennsylvania appears to be an immediate competitor of Virginia in regard to provision of leisure activities. The study concludes with discussions on critical findings along with marketing implications.     

Cost/margin analysis: a third approach to menu pricing and design

The article presents a menu analysis methodology that is compared to menu engineering and the Miller matrix. Cost/margin analysis uses item food cost percentage and weighted dollar contribution margin to develop a sales mix that will both minimize the overall food cost percentage and optimize sales revenue and gross profit return. Previous methods of menu analysis have treated food cost percentage and dollar contribution margin in a mutually exclusive manner. This has resulted in biased interpretation of the data. Cost/margin analysis displays the food cost and contribution margin graphically and clearly identifies the menu items that are helping or hindering the revenue-cost-profit objectives. This information allows the menu to be designed to improve forecasting and cost control techniques.     

Devaluation and US tourism expenditure in Mexico

Studies that investigate the factors affecting US tourism expenditures in Mexico generally regard relative prices in these countries as sensitive determinants. The findings of inelasticity of expenditures of American tourists with respect to prices in the Mexican interior and border in several studies published in the 1980s are debatable. This study evaluates the impact of recent peso devaluations by adjusting 1970–1982 US tourism expenditures by an index that combines the Consumer Price Index in dollars, the CPI in pesos, and the exchange rate. The results here clearly indicate that US expenditures in the interior and on the border are price sensitive and have a strong positive trend reaction to devaluation in both nominal and real terms. Border expenditures clearly exceed interior expenditures and are more sensitive to exchange rate changes than expenditures in interior Mexico.     

An international travel Demand model US Travel to Western Europe

This paper examines international travel demand between the United States and Western Europe. A complete system of demand equations is estimated to obtain expenditure and price elasticities of the demand for travel. The results allow the classification of regions of Western Europe as substitutes or complements according to the preferences of travelers. It is found that Americans view Norway, Sweden, Denmark, Spain, and Portugal as “luxury destinations” that might expect to receive an increasing share of the traveler's budget. The price elasticities are relatively low for France, Belgium, the Netherlands, and Luxembourg. France and the U.K eexhibited high price substitution effects as did France and Germany. Travel to most other countries might be classified as complementary with respect to travel to France and substitutes with respect to the U.K.     

Evaluation of demand: US tourists to Aruba

This study examines international tourism demand to Aruba from the United States. This is the first empirical attempt to estimate the income, price, and exchange rate elasticities on Aruban tourism. An accurate estimate, understanding, and forecasting of the demand based on appropriate analytical methods is important for both the government and private investors. Tourism demand estimates from either the linear and the double log linear models reveal that the effects of income dominate those of prices and exchange rates. In general, US tourists appeared to be highly sensitive to the income variable and inelastic with respect to price. The exchange rate variable was not significant.     

Virtual destination image a new measurement approach

This study utilized enabling internet and computerized content analysis technologies to measure destination image from a phenomenographic post-positivist perspective. In an online survey, respondents were asked to describe their image of one of seven case study destinations that they had never visited before, in a narrative format. The large amount of qualitative data was content analyzed using artificial neural network software. The results produce a vivid three-dimensional picture of the differences and commonalities among the images of selected destinations. It is concluded that an interactive narrative approach presents an alternative measurement technique that can contribute significantly to future image research.     

The cost efficiency of Australian airports post privatisation: A Bayesian methodology

This paper reports on the cost efficiency of Australian airports using a Bayesian panel stochastic frontier model. With data from 2002 to 2007, the paper focuses mainly on the post privatisation period of Australian airports. The results show that the cost efficiency of Australian airports has increased over time to reach a high value of 90.08% in 2007. The paper discusses the potential impact of factors such as privatisation, price cap regulations and capital investments on the current efficiency level of Australian airports.     

Optimal imperfect pricing decision-making: Modifying and applying Nash's rule in a service sector context

This paper aims to demonstrate how a simple rule of thumb can form a basis to offer a rational and consistent approach to pricing decision-making when faced with (partially) unknown demand and cost functions. To this purpose Nash's decision rule (1975) is re-evaluated, modified, and applied in a service product context. The decision rule can provide management with a powerful indicator of the direction in which profit will change as the result of a change in price. It specifies the conditions under which differential pricing or discounting may be (more) profitable. In this way, the rule provides a basis for a more competitive business pricing policy. The modification to Nash's rule demonstrates that pricing can benefit from quantitative techniques which are comparatively straightforward to understand and apply. It reduces uncertainty by specifying the required elasticity of demand necessary to make change in price worthwhile. With this rule, managers have an additional tool to evaluate potential price changes in the context of particular market circumstances. The paper concludes by explaining how Nash's applied and modified rule provides an original and rational methodology for exploring whether discounting is a suitable pricing strategy for service businesses with high variable costs and inelastic demand patterns.     

Roles of passengers' engagement memory and two-way communication in the premium price and information cost perceptions of a luxury cruise

The luxury cruise line is considered to be one of the most promising target markets because of its tremendous growth potential. However, because the service is expensive, the establishment of an effective price strategy is necessary. This study empirically demonstrates cruise passengers' engagement roles in the perception of two-way communication with employees, which relates to passengers' price and information cost perceptions. Passengers' engagement is measured in terms of five dimensions: identification, enthusiasm, attention, absorption, and interaction. Structural equation modeling is used based on questionnaire data. The findings of this study suggest an alternative price strategy to alter passengers' price perceptions.     

Improving revenue performance with third-degree price discrimination in the cruise industry

The leisure cruise industry has enjoyed high levels of growth for nearly five decades due in part to traveler interest in the cruise experience, but also to relatively lower pricing. Although revenue management of cruise fares is now standard practice, there are untapped opportunities to improve yields through data-driven market segmentation and third-degree price discrimination. This paper uses a finite mixture modeling approach to develop, empirically validate, and compare pricing models. By unveiling segments of travelers based on individual attributes, third-degree price discrimination can improve target marketing, the timing and appeal of price discounts, and the matching of variable demand with fixed, though differentiated, room supply. Empirical results from running thousands of simulations with pricing data from one of the world’s largest cruise lines show that the segmentation analysis using third-degree price discrimination can increase fare revenue more than four percent. The modeling approach used in this research extends the emerging literature on revenue management in the cruise industry and offers meaningful managerial implications for advanced pricing tactics and revenue management.     

Guatemalan tourism and the efficacy of wage employment in Panajachel

Although tourism's apparent financial benefit to the Guatemalan economy in terms of earning foreign exchange is well known, there has been little micro-economic research done on how the country's third largest export industry affects individual communities. Therefore, this study compares price and wage data to provide initial leads on how tourism affects the food purchasing power of wage earners in the developing tourist community of Panajachel. Research shows that between 1964 and 1978, tourist-industry demands on local food supplies helped inflate food prices far above wage increases, and contributed to a wage laborer's loss of food-purchasing power. Thus in most cases, wage-labor employment in Panajachel is not efficacious in terms of maintaining or increasing the ability to purchase food.     

Price competitiveness of tourism packages to Australia: Beyond the “Big Mac” index

One issue facing any country or region concerns its price competitiveness as a package tour destination. One method of measuring this is to use what in other contexts has been referred to as the Big Mac approach. The “Big Mac” is a simple product with ingredients in fixed proportions, whereas the tourism product is a very complex one comprising different components depending on tourist expenditure patterns. There is no equivalent tourism product offered across countries, as the nature of the product is tailored to the origin market, expenditure levels and the length of the trip involved. The key issue is that of how to standardize the products being compared, so as to determine their relative price competitiveness. A method of constructing price competitiveness indexes, developed by the authors, can be applied to develop measures of the price competitiveness of different tour packages. This paper has three aims: To set down the essence of the preferred approach to measuring price competitiveness, noting its advantages and limitations; to employ this approach to construct price competitiveness indexes for package tours to Australia from Japan and the USA; and to indicate areas for farther research into the price competitiveness of package tourism worldwide.     

A demand-driven analysis of tourist accommodation price: A quantile regression of room bookings

Tourist accommodation expenditure is a widely investigated topic as it represents a major contribution to the total tourist expenditure. The identification of the determinant factors is commonly based on supply-driven applications while little research has been made on important travel characteristics. This paper proposes a demand-driven analysis of tourist accommodation price by focusing on data generated from room bookings. The investigation focuses on modeling the relationship between key travel characteristics and the price paid to book the accommodation. To accommodate the distributional characteristics of the expenditure variable, the analysis is based on the estimation of a quantile regression model. The findings support the econometric approach used and enable the elaboration of relevant managerial implications.     

Destination place planning and design

Destination place management requires that land use and development issues be addressed. Despite considerable advancement in the methodological processes, there is still no clear conceptual destination model to address these issues. Existing models have largely been developed through a fragmented case-study approach and have not yet achieved a sufficiently integrated conceptual basis for a comprehensive understanding of the spatial characteristics of destination regions. This paper attempts to sharpen the conceptualization of the core elements of destination regions by building upon existing models and concepts. The model presented here is a systemic construct and provides for a common platform from which investigations can proceed into the normative and functional aspects of spatial destination design.     

Importance of early snowfall for Swedish ski resorts: Evidence based on monthly data

Since the early 1970s, Sweden has experienced an almost uninterrupted surge in demand for downhill skiing. However, from the 2009/2010 season, lift ticket sales have stagnated. With the use of monthly data, this study investigates the role of snow depth and economic factors in the demand for downhill skiing in Sweden. The empirical approach is based on a seemingly unrelated regression model, allowing snow conditions, but not economic factors to differ during the season. The estimates show that an early season increase in natural snow depth by 10 cm raises the growth rate of lift ticket sales by 9 percentage points in the same period. Further, the results indicate that downhill skiing is characterised by low income and price elasticities, implying weak impacts on demand for such changes. The price increase of lift tickets exceeds that of the inflation rate. The recent decline in demand might indicate changed leisure preferences.     

Price and RevPAR determinants of Airbnb listings: Convergent and divergent evidence

This paper explores the performance determinants of Airbnb listings, analyzing three research questions. First, the study investigates the different effects generated by the antecedents on price and revenue; second, it ranks different groups of variables; third, it distinguishes between private rooms and entire homes or apartments. These research questions are addressed by analyzing Airbnb listings in Milan, a business city where the sharing economy is growing fast. In particular, the study will use the monthly data of all Airbnb listings in Milan recorded by AirDNA during the period from November 2014 to June 2019, which consists of 323,184 total observations. Some hedonic price models are calculated, adding the Shapley value approach. Empirical findings show some important differences between price and revenue determinants. Furthermore, listing type and size, along with location and seasonality, are by far the most important factors that explain performance differentials among Airbnb properties.     

Market shares analysis: The Case of French Tourism Demand

This 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.