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Analising supply issues in tourist transport (Integration in the tourism…
Analising supply issues in tourist transport
The supply chain in tourist transport services
Research on the supply chain
Descriptions of the industry and its operation, mangerment and marketing
The spatial development and interactions
Focus on established areas of tourism and transport supply
Characteristics
A preoccupation
How their operationd are organised to provide a service to travellers
How the international nature of transport facilitates tourism activities and development
"The tourism product or service"
The sum of transactions
Link the tourist with the suppliers in tourism
Commercial transactions are based on agreed conditions and enforced within a framework of contractual obligations between the parties
Theoretical perspectives on tourism and transport supply issues
oligopoly
influent factors
degree of market concentration
price leadership
criteria
the extent of market concentration
costs of capital, fixed capital and cost of operations
price/product discrimination
the number and size of firm
entry and barrier market
economies/diseconomies of scale and economies of scope
pricing policies
a limited number of producers dominated the transport sector
tourism has a highly dualistic industrial structure
small number of large company
large number of small firms
air travel market
international route
served by many carriers
competitive
served by at least 2 carriers
ideal world
price = profits max
could lead to monopoly
producers can alter output and prices
bus, coach and rail sector = air travel
each firm controls its price and output levels; entry/exit barriers
small firms operated under oligopoly
perfect competition
substantial number of consumers and firms
neither can affect the price of an undifferentiated product
markets are not in real world
free entry and exit, no barriers
monopoly
regulation is imposed ➡️ prevent higher prices and supernormal profits
may be beneficial to the wider public good in tourist transport operations
charge price > average price ➡️ generate high profit level
in many countries, domestic air and rail network are operated
major business or firm is able to exercise a high level of control over price
contestable markets
firm left ➡️ won't be recoupable
sunk costs, firms incurs
new and established firms are able to challenge rival through price strategies
producers can't change prices instantaneously
a complex phenomenon
can't be stored
involvement
other facilities
transport
entertainment
accomondation
natural resources
catering
can not be examined
heavy reliance
main principles
oligopoly
perfect competition
contestable market
monopoly
Integration in the tourism sector: implications
for the supply of tourist transport
Horizontal integration occurs where two enterprises with the same output combine to increase the companies’ control over output. It can occur through mergers, acquisitions, collaboration, franchising agreements and more complex contractual arrangements, and may induce concentration in the same business
Vertical integration occurs when an enterprise with different interests and involvement in the supply chain acquires or merges with companies contributing inputs to its activities, or where output purchasers provide a ready market for the service
Integration is based on the concept of common ownership, which may involve the coordination or control of the production process or may have no direct effect on it.
The natural development of the transaction research is the development of production and consumption chains of services, where bundles of services and commodities are purchased
The significance of integration in the tourism industry and the implications for tourist transport
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The transport function is an important point in the exchange of rights in the tourism transaction chain
Integration is based on the concept of common ownership
Vertical integration occurs when an enterprise with different interests and involvement in the supply chain acquires or merges with companies contributing inputs to its activities, or where output purchasers provide a ready market for the
Integration in tourist transport operations, especially
vertical ownership, may help to reduce costs where higher load factors can be guaranteed for associated companies
Horizontal integration occurs where two enterprises with the same output combine to increase the companies’ control over output
Transaction analysis also provides an opportunity to consider the changing patterns and processes shaping the tourist transport system and the growing internationalisation of the supply chain
Transaction analysis
specific supply chain depends upon a wide range of factors
external
internal
the nature of corporations controlling the transaction chain to
reduce the price to the consumer to boost market share
increase their level of concentration in the tourist industry
maximise profit by eliminating costs
intergral role
linking destinations areas
linking origin
Issues
the relationship between transport supply and tourists remains poorly
confidential and sensitive nature of the data
It's rare to find researchers being given access ro commercial information on supply issue
rival operators
illutrates the significance of "agents" in the system , corporate policy in transport provision and contractual arrangement in supply chain