Service risk perceptions and risk management strategies in business-to-business tourism partnerships

Abstract

While risk management, distribution channel behavior, and tourist risks research agendas have gained considerable attention in tourism management over the past years, there is a lack of research on how tour organizers perceive risk related to service collaboration in the value chain and what strategies they apply to handle these risks. This study explores the ways in which incoming tour operators (ITOs) in Madagascar perceive the tourism value chain in terms of risk upstream (towards local service providers) and downstream (towards outbound agencies) and what strategies they apply to cope with these risks. The findings suggest that uncalibrated service quality among local service providers represents a major risk factor for ITOs. Additional risk categories upstream the service value chain include product and infrastructure constraints and competence lack. Downstream the value chain, market expectation and information about the destination are perceived as risk factors. To absorb these risks, ITOs commonly apply market analysis and communication followed by control and enhancement of value co-creation, competence development, and diversification. This study emphasizes the gap between what is perceived as the dominating risk category (uncalibrated service quality upstream) and the strategy that is applied to minimize service risks (market communication downstream) in the tourism value chain. Based on the findings, the authors propose a conceptual model for predicting risk-coping behaviors in business-to-business tourism partnerships and discuss the ways in which tour organizers can deliver added value in business-to-business partnerships both upstream and downstream the tourism value chain.