It is essential to a company selling tours. Given that a holiday tour is a purely discretionary expense for this company's customers, chances are that elasticity of demand will be high relative to elasticity of supply. This places an extra burden on the company to price their tours efficiently, assuming there is a competitive environment (no monopoly) among tour companies.
Knowing the elasticity of demand is a requirement of knowing the efficient price point, therefore the company must be effective in estimating elasticity in order to survive.
