The price competitiveness of small island states as tourist destinations

Abstract

This dissertation assesses tourism competitiveness in a number of small island states located in different regions of the world. In order to carry out this study an internet travelling agency, namely Expedia, was consulted. Briefly the exercise consisted of finding the prices of flights departing from three principle airports namely London (Heathrow Airport), America (Miami International Airport) and Australia (Melbourne Airport) to a number of small island states, as well as accommodation in these states over two periods or time, one in the summer month of June 2009 and one in the winter month of January 2010. The study focuses on the small island states of the Caribbean and Mediterranean seas; together with the Pacific and Indian oceans. The study contains a literature review which covers a number of topics including the meaning and characteristics of small island states, tourism demand and price competitiveness. The literature shows that there have been different approaches to measuring and assessing competitiveness. However the one adopted in this study is probably the simplest approach, given that prices were readily available. Like all simple approaches, the method has its weaknesses and limitations, including the fact that prices of flights are influenced by the time of hooking and that not all airlines are covered by the internet travelling agency used. The main conclusion of this study is that, as expected, remote island states stand at a disadvantage in terms to competitiveness due to the high cost of flights and the Mediterranean Islands of Malta and Cyprus, for example, are advantaged in this regard. Another conclusion is that in certain places, where the Gross Domestic Profit per capita is not on the high side, the prices of hotels can be relatively high. This is a two edge sword, in that it may at the same time discourage visitors on low budgets, but attracts up-market tourists. A final conclusion is that tourist inflows in the small island states considered, is broadly correlated with the cost of flight to and accommodation costs in these countries.