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The economics of destination cards

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  • Messori, Sonia
  • Fedele, Alessandro
  • Figini, Paolo

Abstract

Destination cards have been recognized as effective tools for promoting tourism destinations. However, their role as mechanisms for coordinating tourism service providers within the destination remains underexplored. We address this gap by developing an enriched version of the Hotelling price competition model to investigate the welfare effect of destination cards. We assume that a destination with two price-setting attractions and one complementary good (transportation) introduces a card offering discounts on attractions and free access to local transportation. We find that the card is welfare-improving, although it also alters the pricing strategy of the attractions and, under certain conditions, might reduce tourist surplus.

Suggested Citation

  • Messori, Sonia & Fedele, Alessandro & Figini, Paolo, 2025. "The economics of destination cards," Annals of Tourism Research, Elsevier, vol. 115(C).
    • Handle: RePEc:eee:anture:v:115:y:2025:i:c:s0160738325001422
    DOI: 10.1016/j.annals.2025.104036
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    Keywords

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    JEL classification:

    • Z3 - Other Special Topics - - Tourism Economics
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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