Tourism Supply Chain Competition And Coordination

As one of critical sectors, tourism has a significant contribution to the national prosperity, economic growth and employment of Hong Kong. Both China central government and Hong Kong local governments have paid a great attention on the sustainable development of Hong Kong tourism industry. The implementation of the Global Tourism Revival Campaign and a series of new initiatives orchestrated, such as the Individual Visit Scheme have successfully promoted the rapid growth of Hong Kong tourism industry. Taking this opportunity, tour operators customize various "Hong Kong package tour" for the mainland tourists to provide convenient and economical tourism services.Package tour is an integrative tourist program purposefully configured out of a variety of tourism activities, such as accommodation, amusing, transportation, sightseeing, shopping, and dinning etc. Different types of tourist components (activities) in package tours are provided by specialist agents and enterprises that form tourism supply chains. These competitive, interdependent, and coordinative entities in tourism supply chain work together to provide tourists rich and colorful tourism experiences.The research on tourism supply chain is still at its initial stage. But it has already attracted more attentions recently, as the number of relative literature grows steadily. However, the current studies on tourism supply chain disperse in a number of areas, which are lack of a comprehensive theoretical framework. Meanwhile, little research attention has been paid to the competition and coordination issues. Therefore, based on the practices of Hong Kong tourism industry, this thesis begins with identifying key economic factors on tourism demand, and then focuses on analyzing the competition and coordination in tourism supply chains using game theory approach.This thesis involves nine chapters, and the main content of each chapter is as follows:The first chapter introduces the conception of tourism supply chain, and represents the research objectives and methods, as well as the overall structure of this thesis.Chapter two firstly discusses the unique characters of tourism products, the package tour, and the key factors that impact on tourism demand. Then, based on the previous studies, this chapter comprehensively defines, describes and delimits the basic conceptions and structure of tourism supply chain for package tour. Finally, the chapter points out that the in-depth understand of competition and coordination is valuable and helpful to the efficient and effective tourism supply chain management.Chapter three reviews the relative literature including: literature on tourism supply chains, literature on tourism enterprises and their relationships, and literature on application of game theory in both supply chain and tourism research.Chapter four examines the long-run demand elasticities of Hong Kong inbound tourism for the period 1985:Q1-2006:Q4 using autoregressive distributed lag (ARDL) model. Bounds tests are employed to indentify the long-run relationships between inbound tourism demand and main economic determinants in Hong Kong tourism industry. Then, this chapter uses the i.i.d. Bootstrap, Moving Block Bootstrap and Wild Bootstrap which respectively take account of white noise error term, unknown forms of serial correlation and heteroskedasticity to provide more reliable confidence intervals for the long-run demand elasticities.Chapter five conducts a theoretical investigation into the pricing competition and coordination between a theme pack and a tour operator in the background of Hong Kong Disneyland. A Stackelberg game model is proposed to formulate the leader-follower relationship where the theme pack leads and the tour operator follows. The equilibrium prices are derived by backward induction. The theoretical results show that the theme park can coordinate with the tour operator through a quantity discount schedule. Nash Bargaining game suggests that the theme park receives a larger share of the profit growth due to its dominant market power.Chapter six investigates the optimal decision of service quality in a tourism supply chain including a theme park and a tour operator. The optimal quality decision of the tour operator is firstly discussed given the service quality of the theme park. It is also found that the improvement of the theme park's service quality is not necessarily to motivate the tour operator choosing high service quality. Finally, a brief discussion in duopoly quality competition in tour operator market is addressed.Chapter seven considers a tourism supply chain consisting of a theme park, multiple tour operators and multiple accommodation providers. Tour operators and accommodation providers have two alternative strategies: profit and revenue maximization strategies. Multi-stage game model are proposed to formulate the relationships between the three sectors. Based on equilibrium solutions, this chapter finds the profit maximization strategy is a better choice when all enterprises in each of the sectors choose the same strategy coordinatively. If the tour operators and the accommodation providers freely choose their own strategies, both profit and revenue maximization strategies could coexist in market equilibrium.Chapter eight investigates the competition dynamics in two tourism supply chains, each of which is assumed to consist of a theme park, multiple accommodation providers, and multiple tour operators. Game theory is used to investigate the competition and coordination between these two tourism supply chains, between the three sectors within each supply chain and between the enterprises within each sector when configuring and marketing package holidays. Based on equilibrium solutions, this chapter discusses the impact of tourisms supply chain membership, preference, as well as strategic integrations on the performances of the enterprises, sectors, and whole tourism supply chain.The last chapter summarizes all the work of this thesis and gives some useful suggestions for future research.The research of this thesis closely links theoretic analysis and the practices of Hong Kong tourism industry. It not only extends the research scope of tourism supply chain in academic, but also provides theoretical foundation for sustainable development of Hong Kong tourism industry in practice.