This document discusses supply issues in tourist transport. It analyzes the tourism supply chain and the factors that affect supply, such as market structure. Tourism supply is complex as it involves many interconnected services. Supply is determined by the operating sectors in the industry like transportation, accommodation, food services, and attractions. Market structure models from economics, such as perfect competition, monopoly, oligopoly, and contestable markets, influence firms' pricing and output decisions. The supply chain can involve tourists directly purchasing services or purchasing packages through agents and tour operators.

1. ANALYZING
SUPPLY
ISSUES IN
TOURIST
TRANSPORT

2. Theoretical perspective on tourism
and transport supply issues
TOURISM SUPPLY - is a
complex phenomenon because
of both the nature of the
product and the process of
delivery

3. Theoretical perspective on tourism
and transport supply issues
TOURISM SUPPLY
It is a composite product involving
transport, accommodation, catering,
natural resources, entertainment and
other facilities and services, such as
shops and banks, travel agents and tour
operators

4. Travel Trade
Sector
Accommodation
SectorEventsSector
TransportationSector
Adventure&
Outdoor
RecreationSector
Food Services
Sector
Attractions Sector
EntertainmentSector
Tourism
Services
Operating Sectors of the Tourism Industry

5. The Five Competitive
Forces

6. FACTORS WHICH AFFECT
SUPPLY ISSUES
Perfect competition
Contestable Markets
Monopoly
Oligopoly

7. FACTORS WHICH AFFECT
SUPPLY ISSUES
PERFECT COMPETITION
A number of assumptions exist:
 there are a substantial number of
consumers and firms, implying that
neither can affect the price of an
undifferentiated product
 there is free entry to and exit from the
market, assuming that there are no
barriers

8. FACTORS WHICH AFFECT
SUPPLY ISSUES
CONTESTABLE MARKET
 The key principle here is that
new and established firms are
able to challenge rival businesses
through pricing strategies
Firms/ operators cannot charge
more than average cost because
more competitors would enter
the market

9. FACTORS WHICH AFFECT
SUPPLY ISSUES
MONOPOLY
The opposite of perfect
competition, where a major
business firm is able to exercise a
high level of control over the
price of the product and level of
output

10. FACTORS WHICH AFFECT
SUPPLY ISSUES
MONOPOLY
Firms operating in a
monopolistic market charge
prices above the average cost of
production to generate high
profit levels, so consumers pay a
price higher than in a
competitive market.

11. FACTORS WHICH AFFECT
SUPPLY ISSUES
MONOPOLY
The United Aircraft and
Transport Corporation was
formed in 1929, when William E.
Boeing teamed up with Frederick
Rentschler of Pratt & Whitney.

12. FACTORS WHICH AFFECT
SUPPLY ISSUES
OLIGOPOLY
Each firm controls its price and
output levels and there re entry
and exit barriers
An oligopoly market situation is
characterized by supply
conditions dependent in part
upon the output and pricing
decisions of competitors

13. FACTORS WHICH AFFECT
SUPPLY ISSUES
OLIGOPOLY
 In an oligopolistic market, producers
can alter output and prices while
taking account of their competitors
likely reaction
 The impact of inter-airline pricing
and route –sharing agreements can
achieve joint profits in an
oligopolistic situation

14. FACTORS WHICH AFFECT
SUPPLY ISSUES
OLIGOPOLY
Three leading food processing companies,
Kraft Foods, PepsiCo and Nestle

15. The Supply Chain in Tourist
Transport Services
Transaction chains develop to
link the TOURIST with the
SUPPLIERS of services in
tourism and the TOURISM
PRODUCT OR SERVICE

16. Four Types of Tourism
Transaction chain
ORIGIN
A. DIRECT
PURCHASE
TOURIST
B. PURCHASE
through an
AGENT
TOURIST
TRANSPORT
Transport
DESTINATION
Accommodation
Entertainment/Amenities
Activities
Agent Transport
Accommodation
Entertainment/Amenities
Activities

17. Four Types of Tourism
Transaction chain
ORIGIN
C. DIRECT
PURCHASE
from TOUR OPERATOR
TRANSPORT DESTINATION
Tour Operator Transport
Accommodation
Entertainment/Amenities
Activities
TOURIST

18. Four Types of Tourism
Transaction chain
ORIGIN
D. PURCHASE
Via retail TRAVELAGENT AND TOUR
OPERATOR
TRANSPORT DESTINATION
Tour Operator Transport
Accommodation
Entertainment/Amenities
Activities
TOURIST Agent