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The zero-fee tour: price competition and network downgrading in Chinese tourism

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  • Dev Nathan
  • Yang Fuquan
  • Yu Yin

Abstract

This paper deals with the impact of competition on the tourism network in China. It identifies the supply and demand conditions among service providers, tour operators and tourists that have led to the zero-fee tour and then deals with the impact of this intense price competition in terms of the reduction in product quality and degrading of the whole network. The paper also deals with various attempts by local governments and others to curb the zero-fee tour. It points out that price restrictions have worked in a destination that has established a brand value and, thus, has become a differentiated product. In concluding, the paper deals with the supply reductions that are needed to reduce price competition in various segments of the tourism network.

Suggested Citation

  • Dev Nathan & Yang Fuquan & Yu Yin, 2013. "The zero-fee tour: price competition and network downgrading in Chinese tourism," Global Development Institute Working Paper Series ctg-2013-28, GDI, The University of Manchester.
    • Handle: RePEc:bwp:bwppap:ctg-2013-28
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    File URL: http://www.capturingthegains.org/pdf/ctg-wp-2013-28.pdf
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    References listed on IDEAS

    as
    1. Wang, Dan & Ap, John, 2013. "Factors affecting tourism policy implementation: A conceptual framework and a case study in China," Tourism Management, Elsevier, vol. 36(C), pages 221-233.
    2. Michelle Christian & Dev Nathan, 2013. "Tourism overview: changing end markets and hyper competition," Global Development Institute Working Paper Series ctg-2013-26, GDI, The University of Manchester.
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    Cited by:

    1. Girish Nanda & Keith Hargreaves, 2013. "Restructuring of post-crisis GPNs: tourism in Indonesia," Global Development Institute Working Paper Series ctg-2013-37, GDI, The University of Manchester.

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