Analysis of the importance and value of price in the demand of a tourism destination

Abstract

Tourism sector companies use Revenue Management practices, namelydynamic pricing techniques to address issues such as seasonality, fixed inventory or perishability. Customers are aware of these practices and look for the best Va l u e f o r M o n e ythey can get in their purchases. The concept of value has a quite relevant dimension. And the price is not only perceived as a number, a negative factororresource consuming, it is many timesa sign that advisescustomers on quality and value and,for this reason,absolute price is one of the most important attributes in value perception (Ceylana et al., 2014)and price perception.Literature has focused largely on the management side of pricing strategy, specificallyon Revenue Management practices. In what concerns customers literature has focused its attention on the acceptation of those practices, price fairness, and the attributes and less onhowthe price itselfis perceived, how expectation is affected and how it affects choice and purchase decisions, that is on price perception. It is fundamental to understand how consumers perceive prices and what factors influence those perceptions. How do prices influence demand? How do consumers judge destination prices when making choices? How does that judgement affect their buying intentions?Methodology: a theoretical framework will be developed relating the variables of price, Revenue Management, service, perceived value, e-WOM and purchase behaviour, that will allow an investigation on how Lisbon tourists evaluate price.Results may help companies, namely hotels, to improve their pricing and positioning strategies, keeping themselves competitive and profitable, and keeping customers happy.This investigation is still in an early and exploratory stage; therefore, this communication will present the first approach to the theme.