abstract

This paper analyses the price strategies used by major German and British tour operators for holiday packages in Mallorca. The analysis differentiates package holidays by price (cheap, mid price and expensive), first trying to identify the existence of different strategies for each price level and, second, whether these price strategies have changed during the recent economic crisis. The main results show that, in the German market, there is a clear market leader, while, in the British market, no price leader can be observed. The two markets have reacted differently to the economic crisis. In the German market, the leader-follower model was maintained. In the British market, the economic crisis has led to a more uniform price distribution, with reductions in the prices of cheaper holidays and price rises in the case of the top end of the market. The results were obtained by estimating a hedonic price model using quantile regressions.

6. Conclusions

In this paper, an analysis was made of the price structure of leading German and British tour operators at a European sun and sand destination. This structure has been dynamically described by comparing the relative price situation before and at the end of the current economic crisis. By using QR, it was demonstrated that tour operators use complex price strategies, in the sense that their positioning in relation to the market leader can vary depending on the market segment at which their packages are directed.