Effects of Price Competitiveness on Tourism Performance under Different Economic Conditions

Abstract

Many scholars perceive price competitiveness as a highly relevant element of tourism competitiveness in improving tourism performance. We focused our research interest specifically to understand whether price competitiveness is an important policy instrument in attracting international tourists and their spending. Our empirical study focused on how price competitiveness behaves as a predictor of tourism performance in different economic conditions and whether price competitiveness is a significant cause of tourism competitiveness in improving tourism performance. For that purpose, we conducted empirical analysis within two stages: moderation analysis to understand how price competitiveness influences tourism performance from the point of view of inbound international tourism and how this relationship behaves in different economic conditions; and mediation analysis to understand whether price competitiveness is relevant cause for tourist competitiveness in improving tourism performance. This study has revealed different views about price competitiveness and its influence on the tourism industry. The findings indicate that price competitiveness has rather limited effects on the outcomes of the tourism industry and is not a cause of overall tourism competitiveness in improving tourism performance.