Financial Implications of Seasonal Variability in Demand for Tourism Services (A Draft)

Using Jensen’s inequality (and its mathematical generalization), this contribution shows how increased seasonal (periodic) variability of demand for tourism services can increase the annual profit of a tourism enterprise and the producers’ surplus of a corresponding competitive segment of the tourism industry experiencing this increased variability. It identifies conditions which result in these effects being magnified and takes account of the fact that a tourism business’ supply of services is often subject to capacity utilization constraints. A novel feature is that allowance is made for the possibility that variations in the market demand for tourism services may alter the prices of factors of production.

Issue Date:
Aug 15 2016
Publication Type:
Working or Discussion Paper
DOI and Other Identifiers:
ISSN: 1444-8890 (Other)
Record Identifier:
PURL Identifier:
Total Pages:
JEL Codes:
C02; D20; D41; L83
Series Statement:
Economic Theory, Applications and Issues

 Record created 2017-04-01, last modified 2018-01-23

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