When team play matters: Building revenue management in tourism destinations

Abstract

Competition between tourism destinations is intensifying, and collaboration between stakeholders can increase destination appeal. Until now, such collaboration has limited itself to governance and marketing. To advance an earlier proposal of destination revenue management (RM), we develop a conceptual framework of instigators and limiters to such cooperation between tourism operators. Next, we synthesize the framework with behavioral game theory (BGT), an extension of classical game theory that challenges the utility maximization-based outcomes of the classical version. BGT incorporates additional aspects, such as reciprocity and fairness, into bargaining and cooperation and supports the feasibility of forming a RM alliance. Based on BGT findings, our synthesis provides theoretical and practical insights into how destinations can improve their competitiveness through cooperation in two important RM areas, pricing and demand creation.