Tour operators' price strategie in the Balearic Islands

In this paper we analyse the package tours prices from a sample of British and German tour operators. The offers correspond to one-week tourist packages in the Balearic Islands in a specific hotel establishment. The period studied comprises the 2002 and 2003 high seasons, what provides us with a dynamic perspective. The paper shows the existence of persistent differences in the mean prices from tour operators, as well as price distributions with different dispersion and shape among tour operators and markets. The time variation of these distributions seems to be linked to the market situation and structure. Although the paper is presented as an empirical investigation, the results can be interpreted in the context of theoretical literature on price dispersion.