Perhaps. As someone who travels relatively infrequently, I'm pretty price insensitive. Like I'm traveling. Who cares if one of those locations is 20% cheaper? I wonder of many people are like me. I doubt that people are very price sensitive when visiting landmark cities.

> if supply is restricted. Demand goes down

Luxury goods can behave oddly, but in general demand is independent of supply. Restricting supply causes prices to rise, which lowers demand (at that high price). The underlying demand (at the lower price) remains constant.

I've never been to France or Greece, but are they comparable destinations for a vacation? I was under the impression that a vacation in Athens will be warm and sunny, whereas Paris will likely be cloudy.

They probably meant the Mediterranean part of France (Marseille, Montpellier, etc), but yeah, that comparison seems a bit odd to me too.