Abstract:

Tourism supply chain is a system, which can meet all needs of customers on tourism by providing tangible products and intangible services. However, the distribution channel of tourism products is different from that of tangible products because of their intangibility. Accordingly, for purpose of investigating into the tourism supply system involving of multiple competitive travel agencies and a predominant supplier, we formulated a bilevel programming model with multifollowers to illustrate how to determinate the price of tourism products competitively sold through the traditional retail or the internet channel. The numerical analysis revealed that the travel supplier can get more equilibrium profits than not only that of any single travel agency but also the sum of profits of both travel agencies. It also showed the travel agency, who has larger potential market shares, can get more equilibrium profits than the other one. Eventually, we analyzed the sensitivity of the parameters in the model by use of the scenario analysis to demonstrate how the market factors have effect on the equilibrium results. One obtained from the results: substitution coefficient between the distribution channel of the tourism productions is positively related with the equilibrium price and profits of both the travel supplier and two travel agencies; travel agency with more actual sale quantity can get more equilibrium profit than the other one and its equilibrium profit is independent of the equilibrium price of tourism product, when varying the potential market shares of the travel supplier and two travel agencies; Two travel agencies’ price elasticities were negatively related to their equilibrium prices.

Key words: tourism supply chain, scenario analysis, Nash equilibrium, product pricing, bi-level programming model