Comparative Analysis of Underdeveloped Tourism Destinations' Choice of Cooperation Modes: A Tourism Supply-Chain Model

Abstract

Many underdeveloped tourism destinations have to cooperate with other enterprises in the tourism industry to expand their tourism development. In practice, the choice of proper cooperation modes is a common issue for decision makers of underdeveloped destinations. To provide some insights into this issue, the authors propose a tourism supply-chain model consisting of one tour operator and two tourism destinations, one underdeveloped and one more mature. Unlike previous studies, in this model the mature tourism destination instead of the tour operator takes central place. Under different cooperation modes, the authors first analyse the equilibrium solutions and profits of all members of the decentralized decision-making situation. Then the quantity discount contract is used to coordinate the tourism supply chain and achieve reasonable profit allocation. Based on one numerical example, a comparison of the different cooperation modes is presented and recommendations are provided for the development of underdeveloped tourism destinations.