A substantial discount on ski passes: a synthetic control analysis

The synthetic control method serves as an appropriate and promising approach to do quantitative comparison research. However, the method is rarely used in the context of tourism. We fill this research gap by applying the method to the case of a Swiss mountain destination. Alpine tourist destinations have suffered from a declining demand in the last decade. Fewer tourist visit ski resorts. Consequently, the tourism industry in these destinations is under pressure to seek for solutions to face this falling demand. Saas-Fee, a Swiss mountain destination particularly hard hit by the decline of visitors has come up with an innovative offer: A substantial price discount on ski passes. In this present study, we aim to estimate the causal effect of the price discount in Saas-Fee. We adopt the synthetic control method to analyze the impact of the destinations’ policy on tourism demand. Further, we perform placebo tests on all units in our donor pool to evaluate the significance our results. Finally, we show how to assess the assumptions of the synthetic control method in the context of tourism