Title: Revenue sharing contract versus wholesale price contract in a tourism supply chain

Authors: Xun Xu

Addresses: Department of Management, Operations, and Marketing, College of Business Administration, California State University, Stanislaus, One University Circle, Turlock, CA, 95382, USA

Abstract: Tourism supply chain management is a burgeoning field drawing more attention from researchers and practitioners recently. This study analyses a tourism supply chain containing a theme park, multiple hotels, and multiple travel agents. This study explores the mechanisms of revenue sharing versus wholesale price contract offered by the theme park. Using a game theoretic approach, this study finds a unique equilibrium of each party's pricing strategy under the two contracts in all the three channel power structures. Only when travel agents dominate the tourism supply chain, travel agents accept the revenue sharing contract and use different pricing strategies to obtain higher profits. This study contributes to the existing modelling studies by extending the number of stakeholders and adding more levels of supply chain. The findings provide intelligent insights for each party of stakeholders in a travel agents dominated-tourism supply chain to increase their profits by implementing revenue sharing contract.

Keywords: supply chain management; SCM; pricing strategy; channel power; tourism supply chains; revenue sharing contracts; wholesale price contracts; theme parks; hotels; travel agents; game theory; modelling.

DOI: 10.1504/IJSCOR.2016.078182

International Journal of Supply Chain and Operations Resilience, 2016 Vol.2 No.2, pp.144 - 165

Received: 01 Dec 2015
Accepted: 05 Feb 2016

Published online: 07 Aug 2016 *

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