Influence of Nature Motivation on Price Sensitivity

Abstract

The purpose of this article is to analyse the effect of the nature-based character of a region on tourist sensitivity to price. The hypothesis states that the tourist sensitivity to price is moderated, at the moment of choosing a destination, by the motivation that drives tourists to search for destinations that allow them to be in contact with nature. We measure and identify tourists’ sensitivities to price – individual by individual – from real choices made by tourists in order to facilitate realism, i.e. tourist sensitivity to price is estimated for each individual by observing the destination s/he actually selects. The empirical application is carried out on a sample of 2,127 individuals, and the operative formalization used to estimate individual sensitivities to price follows a Mixed Logit Model. The results show an incremental effect of the nature-based character of destinations on tourist insensitivity to price; i.e. people looking for destinations with nature traits find their price sensitivity moderated by this motivation in such a way that the negative effect of price diminishes.

Key Words:

• Mixed logit
• nature motivation
• destination choice
• sensitivity to price
• Spain

Notes

^aprob < 0.1%; ^bprob < 5%.

*Intra-group variance.

^aprob < 0.1%.

^bprob < 1%.