Journal of Applied Economic Research
ISSN 2712-7435
Price Policy of Hostels in Big Cities (by Example of the Russian South)
Latushko N.A., Gnezdilova V.V., Ruban D.A.
Abstract
Abstract.The development of tourism and the hospitality industry is a state priority for Russia. Its successful accomplishment can be facilitated, particularly, by increasing the number of collective accommodation facilities of different types, including hostels. In this work, we analyze the pricing policy of the latter in three big cities of the Russian South, namely Rostov-on-Don, Volgograd, and Krasnodar. All of them are characterized by focusing on relatively low-cost accommodation. It is established that both the average (mean) and median values of the minimal cost of hostel accommodation are the lowest in Krasnodar and the highest in Volgograd. This can be explained by the bigger number of such hospitality organizations in the former city, where, consequently, stronger competition encourages as policy aimed at lower prices. The pricing policy of hostels can be considered as the best formed in Rostov-on-Don. Hostel accommodation costs in the big cities of the Russian South can be compared with that in similar towns by population, administrative role, and economic specialization in Europe, from which Hamburg, Germany, Lyon, France, and Birmingham (UK) are chosen. The comparison of the prices based on average annual currency exchange rates demonstrates significant «cheapness» of hostel accommodation in the Russian South. However, taking into account the purchasing power parity of currencies relatively to the US dollar, for which we use the World Bank index and the Big Mac Index, it is possible to find that the difference of prices is not so significant. Moreover, the hostel accommodation cost in the big cities of the Russian South and Europe is comparable sometimes. Therefore, the above-mentioned «cheapness» is partly relative. In regard to the said above, it becomes evident that the pricing policy of hostels in the big cities of the Russian South has to be improved. This is especially ture before the FIFA World Cup due in 2018 as some matches that will take place in Rostov-on-Don and Volgograd will require accommodation of numerous people, many of which will favour hostels. We propose that necessary administrative support should be provided and, possibly, some subsidies for increasing the number of hostels in the noted cities, the result of which will be a decrease in prices because of an increase in competition among hostels.
Keywords
Key words: business activity; purchasing power parity; tourism; hostel; Russian South.
About Authors
DOI: http://dx.doi.org/10.15826/vestnik.2016.15.4.24
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