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Price Interactions between Theme Park and Tour Operator

Author

Listed:
  • 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)

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.

Suggested Citation

  • Haiyan Song & Shu Yang & George Q. Huang, 2009. "Price Interactions between Theme Park and Tour Operator," Tourism Economics, , vol. 15(4), pages 813-824, December.
    • Handle: RePEc:sae:toueco:v:15:y:2009:i:4:p:813-824
    DOI: 10.5367/000000009789955099
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    References listed on IDEAS

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    1. M. Thea Sinclair, 1997. "Tourism and Economic Development: A Survey," Studies in Economics 9703, School of Economics, University of Kent.
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    Cited by:

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    2. Junfeng Dong & Ye Shi & Liang Liang & Huaqing Wu, 2012. "Comparative Analysis of Underdeveloped Tourism Destinations' Choice of Cooperation Modes: A Tourism Supply-Chain Model," Tourism Economics, , vol. 18(6), pages 1377-1399, December.
    3. Khalilzadeh, Jalayer & Wang, Youcheng, 2018. "The economics of attitudes: A different approach to utility functions of players in tourism marketing coalitional networks," Tourism Management, Elsevier, vol. 65(C), pages 14-28.
    4. Sigbjørn Tveteraas & Frank Asche & Kristin Lien, 2014. "European Tour Operators' Market Power When Renting Hotel Rooms in Northern Norway," Tourism Economics, , vol. 20(3), pages 579-594, June.
    5. Qiang Guo & Ye Shi & Junfeng Dong & Xiaolong Guo & Chris K. Anderson, 2014. "Pricing Competition and Channel Coordination in the Tourism Supply Chain with Optional Tours," Tourism Economics, , vol. 20(5), pages 939-960, October.
    6. Xiaolong Guo & Lina He, 2012. "Tourism Supply-Chain Coordination: The Cooperation between Tourism Hotel and Tour Operator," Tourism Economics, , vol. 18(6), pages 1361-1376, December.
    7. Chenchen Yang & Junfeng Dong & Jingjing Hao, 2019. "Cooperation Contracts Between Small and Major Scenic Spots in Peak Seasons," SAGE Open, , vol. 9(3), pages 21582440198, July.
    8. Arenoe, Bjorn & van der Rest, Jean-Pierre I. & Kattuman, Paul, 2015. "Game theoretic pricing models in hotel revenue management: An equilibrium choice-based conjoint analysis approach," Tourism Management, Elsevier, vol. 51(C), pages 96-102.
    9. Leask, Anna, 2016. "Visitor attraction management: A critical review of research 2009–2014," Tourism Management, Elsevier, vol. 57(C), pages 334-361.

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