Accommodation

Marketing

Context (archaeology)

Neuroscience

Biology

Microeconomics

Competitive advantage

Tourism

China

Archaeology

Economics

Destinations

Mainland China

Business

Profit maximization

Geography

Hospitality

Supply chain

Revenue

Industrial organization

Finance

Profit (economics)

Enterprises in a tourism supply chain usually adopt and operate two business strategies: maximizing their profits or their revenues. This paper investigates the conditions on which these strategies allow enterprises to achieve the maximum benefits in the context of entire supply chain. Several managerial implications have been derived from this theoretical research. Firstly, theme park operator, tour operators and hotel & accommodation providers obtain larger market shares and profits if they select the revenue maximization (R) strategy. Secondly, the profit maximization (P) strategy is a better strategy for both sectors when all the tour operators and all hotel & accommodation providers choose the same strategy. Finally, if both sectors could freely choose their strategies, there is market equilibrium where P-strategy and R-strategy could coexist. INTRODUCTION Tourism and hospitality industries have enjoyed rapid developments in recent years. This is particularly true in emerging economies in the greater China region, including Hong Kong. A number of tourism and shopping destinations have been upgraded and launched in Hong Kong. These features are particularly attractive to tourists from the mainland China, in addition to those from the rest of the region and those from the West. Tour operators are providing package holiday products consisting of core components such as theme park (e.g. DisneylandHK or OceanPark), and shopping experiences in Time Square, Pacific Places, etc. As a result, a complex supply chain has already developed in Hong Kong tourism and hospitality industry. Package holidays are tourist programs that are purposefully configured out of a variety of tourist activities. Tourist attractions (man-made, natural, cultural or social), accommodation, transportation, and dining and shopping experiences are typical core tourist components of the package holiday products. Different types of tourist components (activities) in package holidays are provided by specialist agents and enterprises that form tourism supply chain. A typical tourism supply chain (TSC) comprises the suppliers of all the goods and services that go into the delivery of tourism products to consumers (Richard and Xavier). There has been a rich literature on the behavioral view of enterprises on the periphery of mainstream economic thought. Perhaps the most important assumption is that enterprise is to maximize profits strategically according to the classical formulation (Hirshleifer 1980). However, this pure profit maximizing strategy behavior has been criticized by many economists, such as

Strategy choice in tourism supply chains for package holidays: a game-theoretic approach