MEASURING ASYMMETRIC INFORMATION IN ALBANIAN TOURISM

Abstract

This paper was focused on the asymmetric information in Albanian tourism and particularly holiday hotels sector using the dataset provided by the cross-sectional survey. Importantly, it showed some evidence of the existence and the effects of the asymmetric information in this market. More specifi cally, the main initial evidence are the cases of negotiations between hoteliers and tourists and the price discrimination between domestic and foreign tourists. It seems that, although many hoteliers are prepared to discuss prices, many tourists do not negotiate prices because they are not informed of these opportunities, refl ecting the presence of asymmetric information among tourists. Interestingly, about eight per cent of the holiday hotels which declare their prices, have employed the price discrimination and the prices charged to foreign tourists are on average 26 per cent higher than prices charged to domestic tourists. Moreover, a considerable proportion of hotels employ their own website as an advertising media, but only a few tourists replied that they were informed through this source, which may be important for future business decisions. Also, this may refl ect again the possible presence of asymmetric information in this market, since tourists may not know about the existence of this kind of advertising and thus do not use it. As emphasised in this paper, the lack of information and marketing constitutes a major defi ciency of Albanian tourism. There is an urgent need to strengthen the policy awareness for the marketing and promotion of Albania as a tourist destination. It is important to establish effi cient institutions which may elaborate and co-ordinate the related policies and strategies. These institutions may work for a more intensive representation of the country at tourism trade fairs and other international activities. The role of Government should be not only to increase the level of budget for these activities but also to work closely with the private sector and encourage the private initiatives to improve the international image of Albania. Finally, this paper has examined an area largely unexplored by economists and further research devoted to this point may generate more revealing and useful insights.