Wednesday, 26 August 2009

The need for a tourism consumer price index?

I was reading the Independent today when i was struck with the recommended prices for the newspaper outside the UK.
Cyprus 4.20 Euro
Greece 3.5 Euro
Austria 3 Euro
Germany 3 Euro
Italy 3 Euro
Luxembourg 3 Euro
Spain 3 Euro
Malta 2.95 Euro

Now if one ranks these countries in terms of how rich is the average citizen (i.e. per capita GNP in purchasing power parity terms) the ranking is vastly different. With the EU-27 as 100 the richest per capita countries are:

Luxembourg 252.8
Austria 123
Germany 116
Spain 103.9
Italy 100.5
Greece 95.3
Cyprus 94.6
Malta 76.4

I think this shows that the implicit feeling in Cyprus is a very expensive tourist destination can be seen by such articles such as a foreign newspaper. Many tourist oriented products that are not included in the basket of products that is used to estimate the consumer price index. Yet prices of tourist friendly products in Cyprus are prices in complete disregard of income or transport costs. And once again this implicitly shows that Malta is doing something right when it comes to tourism - cost does not come up as worry nearly as much in tourist surveys as it does in the case of Cyprus.

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