Analysing supply issues in tourist transport

Theoretical perspectives on tourism and transport supply issues

The supply chain in tourist transport services

Transaction analysis

Integration in the tourism sector: implications for the supply of tourist transport

Perfect competition

Contestable markets

Monopoly

Oligopoly

There are a substantial number of consumers and firms, implying that neither can
affect the price of an undifferentiated product

There is free entry to and exit from the market, assuming that there are no barriers

Information and supply conditions are available to all producers and, whilst producers cannot change prices instantaneously, consumers can react immediately

New and established firms are able to challenge rival businesses through pricing strategies

Best described as the opposite of perfect competition, where a major business or firm is able to exercise a high level of control over the price of the product and level of output

An oligopoly exists where a limited number of producers dominate the transport sector

In an oligopoly, each firm controls its price and output levels and there are entry and exit barriers

Descriptions of the industry and its operation, management and marketing

The spatial development and interactions that characterise the industry at different
geographical scales

Maximise profit by eliminating costs

Reduce the price to the consumer to boost market share

Increase their level of concentration in the tourism industry

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

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