Practice has shown that prices, an important economic factor, have a significant effect on the choice of tourist destination, i.e. they have a direct impact on the tourism demand and add to its elasticity. More often than not, the connection between the 'prices in the hospitality industry and tourism demand dynamics' is not a simple one. Many various factors besides prices in the hospitality industry influence the decision on a tourism trip, rendering this connection very complex. The effect of prices on domestic tourism demand is particularly evident in developing countries with low avarage salaries. To be better able to objectively perceive the effect of price growth in the hospitality industry, in addition to the basic parameters (prices in hospitality services, domestic arrivals and overnight stays of domestic tourists), we also analysed the cost of life, average salaries and changes in the euro exhange rate. All the parameters are for Serbia and they cover a period of fifteen years, 2002-2016. The principal method used in the research is the statistical method of linear correlation analysis, where the linear correlation coefficient was taken as an indicator.