Tourism Market Segmentation Based on Price Sensitivity

This article builds on the double role of the effect of prices on the choice of tourism activities: not only is it the sole component of the destination marketing mix that represents revenue but also a determinant factor in tourist choice. On this account, identifying patterns of tourists with different degrees of sensitivities to prices would help destinations design an appropriate bundle of activities and have a clear definition of the segment they should try to attract. Accordingly, the objective of this article is to identify tourist segments from individual price sensitivities to activities. The results show—although price has a dissuasive influence on the choice of activities—a differentiated effect (as this dissuasiveness is not general for all individuals); this heterogeneous responsiveness to price supports its use as a segmentation criterion. In the empirical application, four segments are found with significantly different price sensitivities.

[1]  W. Douglass Shaw,et al.  A Discrete-Choice Model of Recreational Participation, Site Choice, and Activity Valuation When Complete Trip Data Are Not Available' , 1991 .

[2]  J. H. Ward.  Hierarchical Grouping to Optimize an Objective Function , 1963 .

[3]  Haiyan Song,et al.  A Mediation Model of Tourists' Repurchase Intentions for Packaged Tour Services , 2009 .

[4]  A. Decrop,et al.  A grounded typology of vacation decision-making , 2005 .

[5]  T. Baum,et al.  Strategic Segmentation: An Empirical Analysis of Tourist Expenditure in Turkey , 1997 .

[6]  Roger L. Moore,et al.  Recreation demand and the influence of site preference variables. , 1998 .

[7]  Ching-Fu Chen,et al.  How destination image and evaluative factors affect behavioral intentions , 2007 .

[8]  Chandra R. Bhat,et al.  Traveler Behavior and Values Analysis in the Context of Vacation Destination and Travel Mode Choices , 2010 .

[9]  R. Scarpa,et al.  Destination Choice Models for Rock Climbing in the Northeastern Alps: A Latent-Class Approach Based on Intensity of Preferences , 2005, Land Economics.

[10]  R. Brau.  Demand-Driven Sustainable Tourism? A Choice Modelling Analysis , 2008 .

[11]  Wolfgang Haider,et al.  A model of tourist choices of hypothetical Caribbean destinations , 1990 .

[12]  P. Kotler,et al.  Marketing for Hospitality and Tourism , 1995 .

[13]  I. G. Esteban,et al.  Fundamentos y técnicas de investigación comercial , 1994 .

[14]  Geoffrey I. Crouch,et al.  The Study of International Tourism Demand: A Review of Findings , 1994 .

[15]  P. Forsyth,et al.  The price competitiveness of travel and tourism: a comparison of 19 destinations , 2000 .

[16]  Joseph S. Chen.  Market segmentation by tourists’ sentiments , 2003 .

[17]  F. Leisch,et al.  Winter Tourist Segments in Austria: Identifying Stable Vacation Styles Using Bagged Clustering Techniques , 2003 .

[18]  C. Morley.  Discrete Choice Analysis of the Impact of Tourism Prices , 1994 .

[19]  K. Seltman.  Marketing for management. , 2004, Marketing health services.

[20]  J. Nicolau,et al.  The influence of distance and prices on the choice of tourist destinations: the moderating role of motivations. , 2006 .

[21]  David C. Bojanic.  Consumer perceptions of price, value and satisfaction in the hotel industry: an exploratory study. , 1996 .

[22]  Els Gijsbrechts,et al.  Prices and pricing research in consumer marketing: Some recent developments , 1993 .

[23]  J. Louviere,et al.  The Determinants of Convention Site Selection: A Logistic Choice Model from Experimental Data , 2004 .

[24]  Geoffrey I. Crouch,et al.  Segmenting Markets by Travel Expenditure Patterns: The Case of International Visitors to Australia , 2006 .

[25]  William B. Dodds,et al.  Effects of Price, Brand, and Store Information on Buyers’ Product Evaluations , 1991 .

[26]  Jordan J. Louviere,et al.  Modelling consumer choice behaviour in space tourism , 2009 .

[27]  Hjp Harry Timmermans,et al.  A day in the city: Using conjoint choice experiments to model urban tourists' choice of activity packages , 1995 .

[28]  Alastair M. Morrison,et al.  Travel decision pattern segmentation of pleasure travel , 1997 .

[29]  G. Crouch.  Effect of income and price on international tourism , 1992 .

[30]  William C. Norman,et al.  An Examination of the Determinants of Entertainment Vacationers’ Intentions to Revisit , 2001 .

[31]  Bettina Grün,et al.  Challenging “Factor–Cluster Segmentation” , 2008, Journal of Travel Research.

[32]  J. Nicolau,et al.  Price Sensitivity to Tourism Activities: Looking for Determinant Factors , 2012 .

[33]  H. Thomas,et al.  THE LINKAGE BETWEEN STRATEGY, STRATEGIC GROUPS, AND PERFORMANCE IN THE U.K. RETAIL GROCERY INDUSTRY , 1990 .

[34]  Ching-Fu Chen,et al.  Perceived value, satisfaction, and loyalty of TV travel product shopping: Involvement as a moderator , 2008, Tourism Management.

[35]  M. Pritchard,et al.  The Loyal Traveler: Examining a Typology of Service Patronage , 1997 .

[36]  J. Petrick.  First Timers’ and Repeaters’ Perceived Value , 2004 .

[37]  Clive Morley,et al.  Experimental destination choice analysis. , 1994 .

[38]  The Demand for Recreational Fishing in Montana , 1998 .

[39]  Emine Sarigöllü,et al.  Benefits Segmentation of Visitors to Latin America , 2005 .

[40]  Jordan J. Louviere,et al.  A review of Choice Modelling research in tourism, hospitality and leisure , 2001 .

[41]  D. McFadden.  Conditional logit analysis of qualitative choice behavior , 1972 .

[42]  Blair F. Stevens.  Price Value Perceptions of Travelers , 1992 .

[43]  William B. Dodds,et al.  the Effect of Brand and Price Information on Subjective Product Evaluations , 1985 .

[44]  C. Laesser,et al.  Market Segmentation by Motivation: The Case of Switzerland , 2002 .

[45]  Stephen L. J. Smith.  Tourism Analysis: A Handbook , 1989 .

[46]  J. Petrick.  Segmenting cruise passengers with price sensitivity , 2005 .

[47]  G. Ronning,et al.  Discrete Choice Analysis of Foreign Travel Demand , 1992 .

[48]  A. Apostolakis,et al.  A Choice Modeling Application for Greek Heritage Attractions , 2005 .

[49]  D. Hensher.  How do respondents process stated choice experiments? Attribute consideration under varying information load , 2006 .

[50]  Jonathan Z. Bloom,et al.  Tourist market segmentation with linear and non-linear techniques , 2004 .

[51]  Sara Dolnicar,et al.  Beyond “Commonsense Segmentation”: A Systematics of Segmentation Approaches in Tourism , 2004 .

[52]  M. Pritchard,et al.  Destination Price-Value Perceptions: An Examination of Origin and Seasonal Influences , 1997 .

[53]  M. Uysal,et al.  An examination of the effects of motivation and satisfaction on destination loyalty: a structural model , 2005 .

[54]  Wolfgang Haider,et al.  Trends in winter sport tourism: challenges for the future. , 2008 .

[55]  M. Uysal,et al.  Segmenting the Japanese Tour Market to Turkey , 2003 .

[56]  G. Erickson,et al.  The Role of Price in Multi-attribute Product Evaluations , 1985 .

[57]  Antoni Riera.  MODELOS DE ELECCIÓN DISCRETA Y COSTE DEL VIAJE. LOS ESPACIOS NATURALES PROTEGIDOS EN MALLORCA , 2000 .

[58]  Daniel R. Fesenmaier,et al.  Conceptualizing the travel decision-making hierarchy: a review of recent developments. , 2002 .

[59]  K. Train.  Recreation Demand Models with Taste Differences Over People , 1998 .

[60]  Elisabeth Kastenholz,et al.  Segmenting Tourism in Rural Areas: The Case of North and Central Portugal , 1999 .

[61]  J. Petrick,et al.  An Examination of the Construct of Perceived Value for the Prediction of Golf Travelers’ Intentions to Revisit , 2002 .

[62]  S. Dolnicar,et al.  Discretionary Expenditure and Tourism Consumption: Insights from a Choice Experiment , 2007, Journal of Travel Research.