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