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European Tour Operators' Market Power When Renting Hotel Rooms in Northern Norway

Author

Listed:
  • Sigbjørn Tveteraas

    (University of Stavanger, Stavanger, Norway)

  • Frank Asche

    (University of Stavanger, Stavanger, Norway)

  • Kristin Lien

    (The Norwegian Seafood Council, Tromsø, Norway)

Abstract

Market power studies tend to concentrate on seller power, but in several value chains buyer power is an equally important topic. An example is large tour operators' dealings with a fragmented accommodation industry at a tourist destination. The authors present a framework for testing for the degree of oligopsony power exerted by tour operators, where exchange rates play an important role in identifying the model. The empirical framework was applied to demand for hotel accommodation in Northern Norway. The results indicate that European tour operators have oligopsony power in relation to the regional hotel industry, with a markdown of over 24%.

Suggested Citation

  • Sigbjørn Tveteraas & Frank Asche & Kristin Lien, 2014. "European Tour Operators' Market Power When Renting Hotel Rooms in Northern Norway," Tourism Economics, , vol. 20(3), pages 579-594, June.
    • Handle: RePEc:sae:toueco:v:20:y:2014:i:3:p:579-594
    DOI: 10.5367/te.2013.0291
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    References listed on IDEAS

    as
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    3. Brian Davies & Paul Downward, "undated". "Competition and Contestability in the U.K. Package Tour Industry: Some Empirical Observations," Working Papers 98-3, Staffordshire University, Business School.
    4. Newey, Whitney & West, Kenneth, 2014. "A simple, positive semi-definite, heteroscedasticity and autocorrelation consistent covariance matrix," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 33(1), pages 125-132.
    5. Baker, Jonathan B. & Bresnahan, Timothy F., 1988. "Estimating the residual demand curve facing a single firm," International Journal of Industrial Organization, Elsevier, vol. 6(3), pages 283-300.
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    7. Eugeni Aguiló & Joaquín Alegre & Maria Sard, 2003. "Examining the Market Structure of the German and UK Tour Operating Industries through an Analysis of Package Holiday Prices," Tourism Economics, , vol. 9(3), pages 255-278, September.
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    Cited by:

    1. Daniil A. Sitkevich, 2023. "Mechanisms for industrial coordination of “new” tourism regions: The case of Dagestan," Upravlenets, Ural State University of Economics, vol. 14(2), pages 76-89, May.

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