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Can Economics Explain Where All Inclusive Deals Are Offered?

På svenska

Author

Summary, in English

This paper investigates why all-inclusive travel packages are offered at some hotels but not at others. Using the theory of transaction cost, it is argued that all-inclusive contracts mitigate a hold-up problem and that the severity of this problem varies with regard to the hotel's distance from the resort centre. This hypothesis is tested empirically against data from 3,798 hotel offers and is strongly supported. Additionally, some country-specific mechanisms related to the general price level and the degree of corruption are analysed. Countries with all-inclusive offers are characterized by a low price level and high corruption.

Publishing year

2013

Language

English

Pages

339-348

Publication/Series

Tourism Economics

Volume

19

Issue

2

Document type

Journal article

Publisher

IP Publishing LTD

Topic

  • Economics

Keywords

  • ALL-INCLUSIVE CONTRACTS
  • HOLD-UP PROBLEM
  • HOTEL STRATEGIES
  • TRANSACTION COST
  • TRAVEL PACKAGES

Status

Published

ISBN/ISSN/Other

  • ISSN: 1354-8166