Pricing Competition and Channel Coordination in the Tourism Supply Chain with Optional Tours

Qiang Guo, Ye Shi, Junfeng Dong, Xiaolong Guo and Chris K. Anderson
Additional contact information
Qiang Guo: Tourism College, Hainan University, Haikou, PR China
Ye Shi: School of Management, University of Science and Technology of China, Hefei, PR China
Junfeng Dong: School of Management, Hefei University of Technology, Hefei, PR China
Xiaolong Guo: School of Management, University of Science and Technology of China, 96 Jinzhai Road, Hefei, Anhui Province 230026, PR China
Chris K. Anderson: School of Hotel Administration, Cornell University, Ithaca, New York, USA

Tourism Economics, 2014, vol. 20, issue 5, 939-960

Abstract: The authors consider a tourism supply chain that consists of a tour operator in the source market and a local operator at the destination. The tour product is composed of predesigned tours and optional tours. Consumers are sensitive to the price and the availability of optional tours, represented as the ratio of optional tours. The authors analyse how the ratio of optional tours to predesigned tours affects each player's equilibrium decisions given three different consumer attitudes towards optional tours. They find that when the channel is coordinated and the ratio of optional tours is sufficiently large, the local operator may reduce commissions. To curb the impacts of lowering commissions, the authors introduce a tax mechanism aimed at optional tours. Numeral examples are provided to illustrate the pricing impacts of optional tours.

Keywords: tourism supply chain management; optional tours; over-low commission; tax mechanism (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://journals.sagepub.com/doi/10.5367/te.2013.0316 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:toueco:v:20:y:2014:i:5:p:939-960

DOI: 10.5367/te.2013.0316

Access Statistics for this article

More articles in Tourism Economics
Bibliographic data for series maintained by SAGE Publications ().