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Pricing Tourism Services - Case Study Example

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According to the speaker, Geoff Rollason, the purpose of undertaking the market research study is two-prone. In the first instance promoting tourism related services such as adventure climbing in Brisbane depends on the pricing strategy of the firm because people take price as the first and foremost indicator of affordability…
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Pricing Tourism Services
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Download file to see previous pages Then there is a set of dependent and independent variables. Price is a dependent variable with regard to demand and so is supply.
Thus price plays a pivotal role in determining the equilibrium demand and supply. For instance the dependent variable of demand, viz. the availability of substitutes elsewhere such as those in Sydney influences this outcome. According to this outcome, the ACC must make a special effort to attract a variety of customers. The feasibility study provides just that information. The Adventure Climb Company's (ACC) supply curve is relatively inelastic perhaps because of the fact that supply doesn't respond to price changes and demand variations instantly (Gregory, 2007).
In the first instance equilibrium demand for Brisbane Story Bridge climbs is determined by a number of factors such as the price of the product, consumers' incomes, the availability of substitutes, prices of those substitutes, the geographical proximity to the place where substitutes are available, the impact of weather patterns, interstate tax variabilities, supply constraints such as resource-mobility and consumers' preferences for variety. Equilibrium price is determined more or less by some of the same above factors in addition to the level of supply and the elasticity of supply. In other words the supply of Brisbane Story Bridge climbs is relatively inelastic (Rofail, 2002).
Thi...
S

D
P2
P1
D
S
Quantity
Q2 Q1 Q3
This is illustrated by the above diagram. The market equilibrium is identical to the firm's equilibrium here. On the other hand the demand curve is rather elastic because consumers are able to respond to price with instantaneous effect. Thus the market equilibrium for the ACC is shown by the price, P1 where the quantity demanded and supplied is equal to Q1. This outcome would solve the problem of the ACC by identifying the consumer's willingness to pay P1 in Brisbane.
Sydney and Brisbane are two separate regions and therefore the impact of selling walks across the Sydney Harbor Bridge on the business in Brisbane can be summarized as economically varied. For example when resources are separately managed to provide services in two different locations there can be quite strain on the scale of operations in each location. Assuming that the demand for walks in Sydney is constant or growing at a steady p0redictable pace, then the existing resources can be combined to produce the best output. However, demand for walks in Sydney might be influenced by other external factors such as the existence of the Harbor as a place of extra attraction (www.igougo.com). Landmarks such as harbors with an international reputation are more likely to ...Download file to see next pagesRead More
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