Research On Decision-making Of Tourism Project Based On Game Option

At present, tourism is becoming one of the main ways for people to relax, and tourism market demand is increasing . At the same time, the development of tourism has a strong external effects. Tourism project has attracted more investors, causing the competition in tourism market. However,the development of tourism needs coordination and cooperation among many departments and industries, which means the earning of tourism projects will be subject to many external factors with a certain degree of risk. Therefore, in the face of fierce market competition and revenue risks, investment in tourism projects need to use a more realistic decision-making methods.This article aims at introducting the basic idea of the option game and analysis steps,pointing out that as the complexity of the model analysis and other reasons, it has many limits in the practical pplication.However, the idea of option game ideas also can provide a new idea for decision-making, and has been applied in many field, but investment in tourism is rarely involved.Secondly, the paper sets out a simple definition of tourism investment projects, as well as tsimilarities and differences with other investment projects,and analyses the risk of tourism projects. Thirdly, based on previous studies, and considering the time of project construction,the paper builds the option game model of asymmetric duopoly competition between enterprises. Finally, with the Three Gorges scenic entrance area as an example, the application of option game in tourism projects decision-making is examined.Based on the research of literature and empirical studies, the research comes to the following conclusions. Tourism project has some characteristics ,such as strong dependence, relevance, seasonal revenue and the impact on the location. While projects are also faced with resource integration, tourism planning and financial risks which make the future market under high sensitivity lead to earnings uncertainty. At the same time, the gradual increase of travel demand and strong externalities in investment cause tourism market competition.Therefore, the option game theory can be applied to the decision-making of tourism, though there are still some inadequacies. First, any investment in tourism projects will have very significant externalities. The size of the investment cost and the investment strategy of its competitors have a certain relationship, which makes the process of investment in the project, particularly the establishment of the model need to consider the investment cost of uncertainty. However, the increase of variable will cause the complexity of model which will limite the application of the option game method to some extent.Secondly, the geographical proximity of tourism products can receive higher visibility, and reduce their costs through joint advocacy ,which reflect the benefits of cooperation between competitors. Especially for the newly developed tourism projects, because its relatively distant markets do not fully understand to the tourism ,the cost of tourism promotion may be greater and reflect the benefits of cooperation between competitors. However, analysis of the option game in the project investment decisions does not consider the impact of cooperation with its competitors in the strategic options.