Exploring the Relationship between Allotment and Commitment Contracts and the Performance of Hotels and Tour Operators in Egypt

Abstract

Hospitality and travel compose the world's largest industry and contribute greatly to global economic development. Tour operators and hotels are playing the most important and critical role in the tourism sector. Their social and economic performance contribute this role and show the importance of understanding the technical and financial relationship between tour operators and hotels, which help to develop and solve problems of tourism industry. The aim of this study is to explore the relationships between two types of hotels/tour operators’ contracts (allotment and commitment) and performance. Survey data using self-administrated questionnaire have been collected from 300 general managers of luxury hotels and class A tour operators in Egypt. Exploratory factor analysis and structural equation modelling were conducted to achieve the research objectives. The results indicate that commitment contract gives tour operators a very high technical and operational power inside hotel, but it put high financial pressures on tour operators, and make them work on risks especially during unstable economic and political periods. The findings of the current study can be used by academics, hotel managers, and tour operator'smanagers to completely understand the nature of the impacts of the two types of contracts (allotment and commitment) on the company performance.