Intermediaries as Bundlers, Traders and Quality Assessors: The Case of UK Tour Operators

23 Pages Posted: 13 Sep 2005

See all articles by Sofronis Clerides

Sofronis Clerides

University of Cyprus; Centre for Economic Policy Research (CEPR); University of Bologna - Rimini Center for Economic Analysis (RCEA)

Paris Nearchou

University of Cyprus - Department of Economics

Panos Pashardes

University of Cyprus - Department of Economics

Date Written: May 2005

Abstract

We study the intermediary role of tour operators in the market for package tourism. Intermediaries often arise in order to facilitate trade in markets characterized by asymmetric information. In the travel industry, policy-makers have tried to address information asymmetries by providing hotel ratings. We argue that those ratings are not accurate indicators of quality. Ratings provided by tour operators are more informative and allow for international comparisons. Intermediation by tour operators provides a better matching of quality with price and therefore leads to a more efficient market outcome. There is, nonetheless, scope for government intervention to improve information provision.

Keywords: Intermediaries, middlemen, asymmetric information, tour operators, tourism industry

JEL Classification: L15, L83

Suggested Citation

Clerides, Sofronis and Nearchou, Paris and Pashardes, Panos, Intermediaries as Bundlers, Traders and Quality Assessors: The Case of UK Tour Operators (May 2005). CEPR Discussion Paper No. 5038, Available at SSRN: https://ssrn.com/abstract=774165

Sofronis Clerides (Contact Author)

University of Cyprus ( email )

75 Kallipoleos Street
P.O. Box 20537
1678 Nicosia
Cyprus
+357 2289 3709 (Phone)
+357 2289 5049 (Fax)

HOME PAGE: http://sofronis.clerides.com

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

University of Bologna - Rimini Center for Economic Analysis (RCEA) ( email )

Via Patara, 3
Rimini (RN), RN 47900
Italy

Paris Nearchou

University of Cyprus - Department of Economics ( email )

75 Kallipoleos Street
P.O. Box 20537
1678 Nicosia
Cyprus

Panos Pashardes

University of Cyprus - Department of Economics ( email )

75 Kallipoleos Street
P.O. Box 20537
1678 Nicosia
Cyprus

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