Price Interactions between Theme Park and Tour Operator

Haiyan Song, Shu Yang and George Q. Huang
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Haiyan Song: School of Hotel and Tourism Management, The Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong, PR China
Shu Yang: School of Management, University of Science and Technology of China, Hefei, PR China
George Q. Huang: Department of Industrial and Manufacturing Systems Engineering, University of Hong Kong, Hong Kong, PR China

Tourism Economics, 2009, vol. 15, issue 4, 813-824

Abstract: This paper conducts a theoretical investigation into pricing competition and coordination between Hong Kong Disneyland (HKD) and a tour operator. HKD supplies two types of admission ticket to the tour operator: an admission-only ticket and a package ticket that combines admission to the park and one night's accommodation in its hotels. The tour operator then sells these two types of admission ticket in the target market. A Stackelberg game model is proposed to formulate the leader–follower relationship, with HKD leading and the tour operator following. The equilibrium prices are derived by backward induction. The theoretical results show that HKD can coordinate with the tour operator through a quantity discount schedule. A Nash bargaining game suggests that HKD receives a larger share of the profit growth due to its dominant market power.

Keywords: Hong Kong Disneyland; tour operators; Stackelberg game; bargaining game; coordination (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:toueco:v:15:y:2009:i:4:p:813-824

DOI: 10.5367/000000009789955099

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