Mathematical modelling for tourism supply chain considering sustainable effort

Abstract Tourism Supply chain (TSC) refers to techniques aimed at facilitating the sustainable development of tourist destinations through purchasing policies and practices. Sustainability is of particular importance to tour operators because their products are dependent on local operators, including accommodations, transportation, and activities. When a tour operator uses a local operator as a channel for reaching tourists, the ecotourism strategies takes on an additional dimension: which party will perform the ecotourism effort to end tourists. Cost sharing arrangement expands the option by decoupling the execution of ecotourism strategies from its funding. However, tourism is typically described as various supply chains in research, yet little is known about their ecotourism effort when considering cost-sharing. We develop a mathematical model for a tourism supply chain under two scenarios: (i) ecotourism effort without cost-sharing and (ii) ecotourism effort with cost-sharing. Using game theoretic models, we compare equilibrium outcomes under cost sharing and without cost sharing scenarios. The results show that the tourism supply chain generate more profit in without cost-sharing compare to with cost-sharing. The results of our study also indicate that the total profit is higher when the local operator performs the sustainability and a portion of the cost of the ecotourism effort is shared by the tour operator. The economic benefit to the tour operator and local operator is higher when both players dedicate their effort to ecotourism individually. A numerical example is provided to further illustrate our numerical analytical finding and gain more managerial insights.