Price strategies by German and British tour operators in Mallorca

Abstract

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