Tourism industry price war (case of Russian tour operators in Baltic Sea region countries)

Abstract

The price war is a relevant topic to study, as it is believed to have considerable impact on the affected industry. Even though price war deserved vivid attention of the researchers, there is a lack of profound investigation of price war specifics in leisure and hospitality industry, and in particular, in tourism. Tourism sector is intensively developing in Baltic Sea region that is why the analysis of its industry environment is important both theoretically and practically. Goal of the research is: to provide the descriptive analysis of a case of a price war in Baltic Sea region tour industry, identify causes of price war in Baltic Sea tour operator industry; factors of its termination; impact on the industry; and develop a set of strategies for tourism business in a price war market condition Based on the empirical research, author has developed a case, demonstrating huge industry impact of a price war, and elaborated theoretical frameworks of price war ignition and termination adjusted for hospitality and leisure industry. Also, the author identified four strategies of tourism business in price war and estimated their relative success. Finally, a number of practical and theoretical implications were suggested.