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Revenue sharing contract versus wholesale price contract in a tourism supply chain

08 Aug 2016-
TL;DR: In this paper, the authors analyzed a tourism supply chain containing a theme park, multiple hotels, and multiple travel agents, and found a unique equilibrium of each party's pricing strategy under the two contracts in all three channel power structures.
Abstract: Tourism supply chain management is a burgeoning field drawing more attention from researchers and practitioners recently. This study analyses a tourism supply chain containing a theme park, multiple hotels, and multiple travel agents. This study explores the mechanisms of revenue sharing versus wholesale price contract offered by the theme park. Using a game theoretic approach, this study finds a unique equilibrium of each party's pricing strategy under the two contracts in all the three channel power structures. Only when travel agents dominate the tourism supply chain, travel agents accept the revenue sharing contract and use different pricing strategies to obtain higher profits. This study contributes to the existing modelling studies by extending the number of stakeholders and adding more levels of supply chain. The findings provide intelligent insights for each party of stakeholders in a travel agents dominated-tourism supply chain to increase their profits by implementing revenue sharing contract.
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TL;DR: In this paper, a cross-border travel supply chain model and derive the influence of commission, reception fee, and administrative cost on zero-commission tours in Taiwan, and the authors provide strategic implications along with Taiwanese empirical evidence, and provide a reference and foundation for other destinations regarding market pricequantity simulations and strategic options.

15 citations

Journal ArticleDOI
Hui-Li Yan1, Hao Xiong1
TL;DR: In this paper, the impact of online travel agents (OTA) when they step into an original market of a traditional travel agency (TTA) is analyzed. And the results indicate that the more immature the market is the more necessary for TTA to cooperate with OTA, and numerical example and sensitivity analysis of perceived value and price are presented to illustrate the demand squeeze, demand increase and cooperation range of wholesale price.
Abstract: This paper proposes a framework to analyse the impact of online travel agency (OTA) when it steps into an original market of a traditional travel agency (TTA). Based on the multinomial logit choice model, the demand model and the profit model are presented. Then, the demand squeeze, the total demand increase and the cooperation range of wholesale price are analysed. From the analysis, the results indicate that: (1) OTA can increase the demand of the whole market while it squeezes the demand of TTA; (2) The demand squeeze, total demand increase and the range of cooperation wholesale price are all positive with the perceived value from OTA and negative with the perceived value from TTA. (3) The more immature the market is the more necessary for TTA to cooperate with OTA. In addition, numerical example and sensitivity analysis of perceived value and price are presented to illustrate the demand squeeze, demand increase and cooperation range of wholesale price.
Trending Questions (1)
How can tourist sharing be used to increase tourism revenue?

The paper does not provide information on how revenue sharing can be used to increase tourism revenue.