Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/260032 
Year of Publication: 
2012
Series/Report no.: 
Working Paper No. 2012:5
Publisher: 
Lund University, School of Economics and Management, Department of Economics, Lund
Abstract: 
This paper investigates why all-inclusive travel packages are offered at some hotels but not at others. By using the theory of transaction cost, it is argued that all-inclusive contracts mitigate a hold-up problem and that the severity of this problem varies with regards to the hotel's distance to the resort center. This hypothesis is tested empirically against data from 3798 hotel offers and is strongly supported. Additionally, some country-specific mechanisms related to the general price level and the degree of corruption are analyzed. Countries with all inclusive offers are characterized by a low price level and high corruption.
Subjects: 
All-inclusive
contracts
hold-up
transaction cost
tourism
JEL: 
D23
D86
L14
L83
Document Type: 
Working Paper

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