Strategy choice in tourism supply chains for package holidays: a game-theoretic approach

Abstract

Enterprises in a tourism supply chain usually adopt and operate two business strategies: maximizing their profits or their revenues. This paper investigates the conditions on which these strategies allow enterprises to achieve the maximum benefits in the context of entire supply chain. Several managerial implications have been derived from this theoretical research. Firstly, theme park operator, tour operators and hotel & accommodation providers obtain larger market shares and profits if they select the revenue maximization (R) strategy. Secondly, the profit maximization (P) strategy is a better strategy for both sectors when all the tour operators and all hotel & accommodation providers choose the same strategy. Finally, if both sectors could freely choose their strategies, there is market equilibrium where P-strategy and R-strategy could coexist.