Price interactions between theme park and tour operator

Haiyan Song, Shu Yang, George Q. Huang

Research output: Journal article publicationJournal articleAcademic researchpeer-review

28 Citations (Scopus)

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.
Original languageEnglish
Pages (from-to)813-824
Number of pages12
JournalTourism Economics
Volume15
Issue number4
DOIs
Publication statusPublished - 1 Jan 2009

Keywords

  • Bargaining game
  • Coordination
  • Hong Kong Disneyland
  • Stackelberg game
  • Tour operators

ASJC Scopus subject areas

  • Geography, Planning and Development
  • Tourism, Leisure and Hospitality Management

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