Pricing for Hill Tourism Destination: An Empirical Analysis of Sikkim Himalaya, India – Linear Price Model for Himalayan Hill Station

Pricing for Hill Tourism Destination: An Empirical Analysis of Sikkim Himalaya, India – Linear Price Model for Himalayan Hill Station

Debasish Batabyal (Amity University, Kolkata, India)
DOI: 10.4018/978-1-5225-8494-0.ch009
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Pricing an alpine tourism is unlike pricing a tangible product. As a part of overall marketing strategy pricing a destination has lot of intricate issues that starts from the basic characteristics of the destination elements to the changing demand aspects. At the time of packaging, an alpine destination by a tour operator or destination promotion organization (DPO), a simplified model, is used that is not essentially limited to an absurd analysis of attraction features through FAM trips a priori. In almost all Indian leisure destinations, tourists are found to be price sensitive and per capita spending is not so high. So, an Indian alpine destination-specific model, based on simple linear regression equation, largely explaining the spending of tourists and thereby implying a modified landscape value has been explained here.
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All Indian alpine tourist destinations can be broadly categorized into two categories viz. Himalayan and Non-Himalayan. The important characteristic feature of all the destinations is having two different types of weather conditions and accordingly the attraction features. While the Himalayan alpine destinations enjoy a distinctive of two weather conditions and two different types of tourists, Non-Himalayan destinations are having the same salubrious environment. Sikkim is a small hilly state, bounded by vast stretches of Tibetan plateau in the North, the Chumbi Valley, and the kingdom Bhutan in the East, the kingdom of Nepal in the west and Darjeeling (West Bengal) in the south. The state lies between 27º04' 46 ” N and 28º 07' 48” N and 88º 00' 58” E and 88º 55' 25“E covering an area of 7096 sq. Km. Sikkim is famous for scenic valleys forest, snow clad mountains, magnificent Buddhist culture and heritage and peace-loving people. Though small, the environmental, social and cultural diversities are not so. Some scholars believe that the word Sikkim involves Nepalese dialect and it refers to a ‘new place’ or the term has been derived from a Sanskrit word which means a ‘mountain crest’.

Figure 1.

Indian state Sikkim


The people of Sikkim have ethnic diversity. The Bhutias came from Tibet, the Lepchas were the aboriginal community, and the Nepalese came from Nepal. When Sikkim was an independent state and faced many invasions by its neighboring countries and the king took the help of the British India and, later, gifted some of its region including Darjeeling to the British Government. Now this 22nd Indian State (joined Indian Union in 1975) has Over 81% of the total geographical area under the administrative managerial control of the Ministry of Environment and Forest, Government of India. Over 45% of the total geographical area of the state is under tree cover and nearly 34% of the geographical area is set aside as protected area network in the form of national park and wildlife sanctuary. The maximum summer temperature 280C and minimum winter temperature is 00C. Sikkim has a variety of mineral resources including coal, limestone, iron ore, graphite, pyrite etc. The temperature in the bottom of the valleys (up to 600 meters) situated at lower elevations, particularly during summers, are similar to the monsoon type of climate. The temperature starts falling between 600 meters and 2000metres above sea level and the place enjoys cool temperature climatic conditions and further up (2000 meters to 3000 metres) it is cold temperate climate. Arctic type of climate is found above 5000 meters. Sikkim is ecologically a fragile region. The state has the responsibility to conserve its rich biological diversity that includes coexistence and protection of over 5000 species of angiosperm (one third of the total national angiosperms). After becoming 25th state of the Union Government of India in the year 1975 the rapid development activities ushered in a new era of tourism in Sikkim. Increased accessibility by roadways and air transport, rapid socio-economic development, competitive advantage both from the side of the destination and geographical proximity to tourist generating states contributed to the development of tourism in Sikkim.

Sikkim accounts for the largest share of cardamom production in India, and is the world's second largest producer of the spice after Guatemala. Sikkim has the highest share of agricultural land dedicated to organic farming in India. It is also among India's most environmentally conscious states, having banned plastic water bottles and styrofoam products. Tourism is estimated to contribute to around 8 per cent of the state GDP in Sikkim.

Table 1.
Comparative position of Sikkim among top ten states/UTs w.r.t. per capita GSDP
State / Union territoryRankGSDP per capita
India (Country)-----------------------------₹88,533 (US$1,300)
Goa1₹304,666 (US$4,500)
Delhi2₹275,174 (US$4,100)
Chandigarh3₹250,398 (US$3,700)
Sikkim4₹240,274 (US$3,600)
Puducherry5₹175,701 (US$2,600)
Haryana6₹165,728 (US$2,500)
Kerala7₹155,005 (US$2,300)
Uttarakhand8₹153,076 (US$2,300)
Maharashtra9₹152,853 (US$2,300)
Himachal Pradesh10₹147,330 (US$2,200)

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