ABSTRACT
The preceding chapters dealt with demand and supply in the tourism sector. The combination of demand and supply leads us to the important ‘price’ notion. It is clear from the preceding chapters that price is a key element in inter-firm competition. That is the reason why we pay special attention to pricing in tourism. What are the objectives? What are the pricing methods or pricing approaches?
One component of the price consists of taxes and subsidies. They can be important in the tourism sector. Many EU countries apply a VAT rate on tourism products which varies between 15 and 21 per cent or even more. In Chapter 2, we made the distinction between the producer’s price and purchaser’s price. They are related to indirect taxes and subsidies. Therefore, it seems advisable to combine pricing and taxation in one chapter. However, VAT is not the only tax in the tourism sector. In the last two decades, there has been a proliferation of taxes levied on tourism (room tax, air ticket tax, departure tax, foreign travel tax, visa tax, restaurant tax, toll charges, eco-tourism tax, carbon tax, betting tax etc.).
