Prices

Faqar Saadoun Hassan
Asst. Lect. Haider Diaa Salman

Price is defined as the amount of money paid by the buyer in exchange for obtaining goods and services. In tourism, it means the price of the tourism product, as tourism demand is the most affected by prices. In general, the relationship between prices and tourism demand is inverse. The lower the prices of the tourism product, the higher the tourism demand, and vice versa, while other factors remain constant (Al-Taie, 2008: 21).

As prices are severely affected by economic, social, political and cultural factors, they are linked to economic crises. Tourism movement decreases whenever prices change, especially low-cost tourism or mass tourism, for reasons including the effect of inflation on the decline in surplus income and its purchasing power, and the effect of the energy crisis and inflation in raising travel costs above the critical limit for segments of limited income. Tourism demand is flexible when compared to prices, meaning that changing the prices of tourism services results in a relatively greater change in the opposite direction in the size of demand. If the prices of services rise in a certain tourist area, the percentage of tourist demand for it falls by a greater percentage than the percentage of the increase in these prices (Al-Mashhadani, 1993: 14).
The effect of prices on Tourism demand from the following aspects:
A- Countries with a low standard of living represent centers of attraction for tourists from countries with a high standard of living, provided that elements of security and stability are available.
B- The tourism sector is affected by inflation, which reduces tourism demand and the black market appears, so the exchange rate of the local currency decreases, because this demand may be a reason for rising prices, especially when supply cannot keep up with demand.
C- Prices of goods related to demand for tourism and travel, as there is a percentage of people who travel to buy goods, so the cheaper the goods are in a region or country, the more people travel to that region (Ati, 48: 1984)
D- The traveling tourist is affected by prices more than the resident tourist who is accustomed to the prices of the area of residence.
C- The distance between the residence and the area of tourist destination, as transportation costs may constitute the largest percentage of the costs of the trip, which applies to those who travel by sea or land, because air travel measures distance in time and not in kilometers. (Agha, 32: 2004)