Tourism and hospitality market structure: A theoretical discussion

Publication date: Available online 6 August 2019Source: The Social Science JournalAuthor(s): Li Sheng, Wanyang HuAbstractIn this paper a standard model is used to examine the economic effect of market structure in travel destinations. We show that favorable changes in the push and pull factors are good for enhancing local hospitality business to the extent that they stimulate external tourism demand. We also find that rising competition in the hospitality industry, albeit boosting its sales, has no effect on its revenue but can impact its profitability adversely due to resulting price drops that are desirable only to incoming visitors. Our policy implication is that there is no need to push for competitive industry structure, which is locally inefficient given that hospitality business catering to non-resident tourists is for profit not for altruism.

Source: The Social Science Journal - August 7, 2019 Category: Psychiatry & Psychology Source Type: research