TITLE:
Pricing Policies for Sustainable Growth and Development Led by Tourism in the Region of Western Macedonia
AUTHORS:
Nicholas Tsounis, George Agiomirgianakis, Chaido Dritsaki, Aspasia Vlachvei, Efthymia Iliopoulou, Gerassimos Bertsatos, Zacharoula Kalogiratou, Theodoros Monovasilis, Nikolaos Sariannidis
KEYWORDS:
AIDS Model, Domestic Tourism, Region of Western Macedonia
JOURNAL NAME:
Theoretical Economics Letters,
Vol.13 No.7,
December
28,
2023
ABSTRACT: In this paper, we
estimate expenditure elasticities of the main spending categories of domestic
tourists visiting the region of Western Macedonia, Greece with the purpose of establishing sustainable growth and development pricing policies
from the actors of the region. An Almost Ideal Demand System (AIDS)
model is developed and estimated with data collected by field survey. Our
analysis shows that hotel entrepreneurs should adjust their pricing policy in periods with large changes in prices. Also,
food expenditure is not considered as an important category in the
tourists’ preferences, showing some flexibility since in the case of an
increase in the price of museum services, tourists could balance it out by a
reduction in their spending share of food. On the
contrary of this, in case of a price
increase in the museum services, tourists are not willing to reduce their consumption of
these services rather they prefer to compensate
for this increase by a reduction in their expenses for souvenirs.
Moreover, our findings suggest that if the price of museums and the price of
souvenirs would increase, the
share of this category could be reduced. These findings have certain policy implications for hotel owners/managers, for
restaurants and taverns of the region, as well as, for the Ministry of Culture in
setting their pricing policies. The methodology developed in this study and the
adaptation of the AIDS model to examine
tourists’ expenditure patterns with primary survey data can be used by other studies for other regions of Greece or
any other country.