Optimal format design in green tourism supply chain in the presence of a dominant online travel agency

Abstract

Due to a large consumer base owned by a dominant online travel agency(OTA), green hotels widely cooperate with the OTA to sell their products. This study develops a green tourism supply chain model involving an OTA and a green hotel. The study aims to provide valuable insights for the OTA and hotel in optimizing their decision-making process when they come to reach an agreement on cooperation formats among price-only, cost sharing, and revenue sharing. The findings indicate that cost sharing and revenue sharing formats are more effective than price-only format in incentivizing the hotel to improve its environmental efforts. Moreover, these two formats result in higher wholesale prices determined by the hotel compared to the wholesale price set in price-only format. This study also recommends the revenue sharing format as an optimal format, which could lead to a win-win outcome for both the OTA and hotel, achieving profit maximization under specific conditions. Overall, by effectively implementing cooperation formats, the OTA and hotel can work together to promote green tourism supply chain performances.

Keywords: Cost sharing format; Dominant OTA; Green hotel; Green tourism supply chain; Price-only format; Revenue sharing format.