Volume 1 Issue 4 December 2003 Applied Research Note 4

Tourist price sensitivity and the elasticity of demand: The case of BC ferries

by Mark P. Pritchard (Department of Recreation Management and Tourism, Arizona State University, Tempe)

Abstract:
This paper explores how transportation pricing can influence tourist decisions. After a double price hike within a year on a major mainland-island ferry route in Western Canada, the current study examined tourist deand [price elasticity] in the face of future price change. The research estimated demand with several price increase/decrease scenarios. Results suggest local pleasure travellers are highly price-sensitive, and that changes to ferry fares can lead to a two or three fold change in demand for that service. The implications of this for the island’s tourism industry are discussed along with several strategies the destination undertook to reduce visitor sensitivity.

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