Christopher
Pappas
1


New “Economic Naturalist”

Why do British tourists pay less for vacations in Greece than Greek
tourists do?


Why do British tourists pay less for vacations in Greece than Greek tourists do?

British tourists pay less for vacations in Greek islands than Greek tourists do. Based on

Voutsadakis’ article (2009), British tourists pay less for staying in the same hotel, in a room

which offers the same facilities, during the same period of the year, than Greek tourists pay. In

fact, this difference could be as high as €840 for two people staying at a five star hotel in Corfu

from August 10th until August 17th. In other words, British tourists save €840 compared to Greek

tourists. In addition, two British tourists will pay approximately €300 less for staying at a three

star hotel in Rhodes during the same period of time than Greek tourists.



 This price discrimination in favor of British tourists can be explained if we

investigate two primary factors. The first one is the impact of travel agents’ power and the

second one is Greek’s attitude. Travel agents have a great power in influencing the demand for

vacations, as they can shift demand from one country to the other based on the offers they

provide. If agents get good offers from Greek hotels, they will shift the demand towards this

destination. Hotel owners depend on agents in order to increase their demand and hence their

profits. Most hotels depend on travel agents in order to advertise their hotels in Great Britain.

Moreover, agents can smooth the demand and help hotels operate twelve months per year. If

hotels do not offer attractive deals to agents, the agents will direct tourists to other destinations,

e.g. Turkey which offers similar facilities and has the same climate conditions. British tourist

demand for vacations in Greece is elastic and highly sensitive to price changes. If the price for

vacations in Greece is extremely high compared to other countries, tourists will not choose

Greece as their destination. 



 Christopher
Pappas
2





 At the same time, hotel operators take advantage of the Greek tourists’ attitude.

Greeks demand for vacations is characterized by high seasonality. Greeks go on vacations

during Easter and during August. Moreover, they highly prefer staying in Greece than travelling

abroad. They hardly ever consider spending their vacations in any other country but Greece.

Hence, they are willing to save money during the whole year and pay extremely high prices for

their vacations. Due to Greek tourists seasonality and willingness to save, demand and prices

during this specific time periods are very high. Greeks elasticity of demand for vacations in

Greece is highly inelastic. Inelastic demand means that Greek tourists are not that sensitive to

price changes. They are willing to pay higher prices.


To sum up, hotel operators implement price discrimination strategies in order to increase

their revenues and maximize their profitability. Through this strategy, they also manage to

smooth demand for vacations, which is characterized by seasonality.




 Christopher
Pappas
3




Reference

Voutsadakis, M. (2009, May 29). British pay 840 less than we do for vacations in our country.

E-tipos. Retrieved April 10, 2009, from http://www.e-tipos.com/newsitem?id=82796