Price-An Overhyped Indicator In Tourism

Abstract

Purpose: Price is an important indicator of ‘destination competitiveness’. However, price has two different meanings in travellers mind i.e., absolute price and perceived price. In most of the research studies, ‘absolute price’ has been considered as a significant criterion for determining the choice of destination by a tourist. However, this paper finds that, it is the ‘perceived price’, which determines the destination choice.The paper will guide the marketeer, tourist agent and other stakeholders to devise a new marketing strategy and increase the ‘perceived price’ of a destination, without diluting the travel experience and, consequently increasing the tourist arrival in a destination.
Problem statement: Empirical evidence shows that there is marked heterogeneity in price sensitiveness to tourism products for individuals due to individual preference, service quality, nature of service etc. This heterogeneity is occurring due to perception about ‘price’.
Research methodology: For primary data, selected interview of experts was conducted. For secondary data, the tourism data of 8 years (2011 - 2017) for 77 countries were analysed. Then the data was analysed for similarly placed economies competing for similar experience. The primary data and secondary data were matched to see the relationship between theoretical concept and reality.
Results & Conclusion: After analysing the data, the paper finds out that, there is little or no co-relation between absolute price competitiveness and tourist arrival in the global context but the countries competing for similar experience has a strong co-relation. It can also be concluded that, ‘price competitiveness’ is not solely based on ‘absolute price’. The psychological factors play a major role in price perception.