I have a couple of addenda to the column:
First, although I did not want to get into this in the column (I did not have enough space, either), another side-effect of the low-cost tourism is that you end up with low-cost tourists! Although I do not have hard evidence to support it, this is probably one of the reasons revenue-per-tourist figures are on the decline- that the profile of the tourists is changing as well. When you end up with guys unlikely to ever eat outside of the hotel or shop for anything, no wonder shop, restaurant and bar owners are complaining as well (Footnote: the shops have nevertheless other problems; there are just too many of them- which convinces me even more that the invisible hand is not working perfectly here- auctioning off a limited number of permits would have been much better: this is the standard problem of negative externality and the tragedy of the commons, but I have digressed too much- maybe, this should be for next month's editorial).
Besides, the hotels have serious problems with some of the younger tourists- all alcohol-related incidents such as fisticuffs, damage to hotel property and even an incident or two of indecent exposure. In fact, having learned American English, I had not heard of the word Lager Lout until an elderly British couple complained of being disturbed by these guys.
In sum, the low-cost tourism is having side effects other than squeezing the hotels' margins.
Second, the employer-employee relationship has turned into a vicious circle: The employers, already operating under low margins, are not willing to pay more than the bares-minimum to their low-skilled employees. Employees are then more likely to shirk, which, when observed by the employers, makes them even less likely to go for an efficiency wage. Now, does any micro. theorist want to give modeling this a shot?
Last but definitely not the least, credit where it is due: The graphs below are compliments of my friends at Turkey Data Monitor. I am testing the v2 of their program, which should be out soon... BTW, I had already reviewed the v1 of the program, in case you are interested.
Anyway, on to the article: