Behavioural pricing opportunities in tourism destinations: a collaborative approach
by Henri Kuokkanen
International Journal of Revenue Management (IJRM), Vol. 9, No. 2/3, 2016

Abstract: This paper proposes collaborative behavioural pricing strategies to attract additional demand and revenue to a tourism destination. Unlike previous work, it emphasises opportunities to cooperate across tourism-linked businesses not owned by the same entity. Prospect theory (Kahneman and Tversky, 1979) suggests that every spending decision creates disutility to a consumer, but that the marginal disutility of consumption decreases as the expenditure increases. Thus cross-business packages offered in a destination can lead to two types of benefits. First, they increase total visitor expenditure even when additional discounts are offered. Second, with pre-purchase of in-destination services, visitors face fewer spending decisions on arrival, and the resulting reduction in disutility increases their willingness to commit to additional spending. The proposed framework temporally divides visitor spending behaviour before and during the visit to analyse the potential benefits of collaboration. The model is illustrated by a numerical example and future research avenues for testing the framework are outlined.

Online publication date: Fri, 17-Jun-2016

The full text of this article is only available to individual subscribers or to users at subscribing institutions.

 
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.

Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.

Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Revenue Management (IJRM):
Login with your Inderscience username and password:

    Username:        Password:         

Forgotten your password?


Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.

If you still need assistance, please email subs@inderscience.com