4.4 Article

Principal-Agent Relationship Within a Cruise Supply Chain Model for China

Journal

JOURNAL OF HOSPITALITY & TOURISM RESEARCH
Volume 45, Issue 6, Pages 998-1021

Publisher

SAGE PUBLICATIONS INC
DOI: 10.1177/1096348020985328

Keywords

cruise; tourism supply chain; principal-agent theory; travel agency; distribution; China

Ask authors/readers for more resources

The study found that changes in travelers' booking habits and business practices in Mainland China have led to power imbalances between cruise companies and travel agents. As the number of agents grows, they begin to overpower the cruise companies, and alliances among travel agents further impact the principal-agent relationship.
Changes in travelers' booking habits and the evolution of technology have come to threaten the existence of traditional travel agents (TAs). However, the cruise industry still relies heavily on TAs as its main distribution channel. A qualitative study was conducted to investigate the networks, relationships, and power distribution between cruise companies and TAs using a triangulation method via a tourism supply chain model. Principal-agent (P-A) theory was taken as the framework to describe various parties' relationships and roles. Several TA business models were identified, including group blocks (i.e., guaranteed and nonguaranteed) and charter cruises (i.e., retail for resale and corporate; meetings, incentives, conferences, and exhibitions). Results show an imbalance of power between parties due to unique business practices and customer preferences in Mainland China. Principals (i.e., cruise companies) were found to rely excessively on agents (i.e., TAs) to create demand, with the growing number of cruise lines leading agents to overpower principals. The alliance among TAs further affected the principal-agent relationship. A refined tourism supply chain model tailored to the cruise industry is thus proposed herein; this cruise supply chain model simplifies the complicated business network relationships between cruise companies and TAs in China.

Authors

I am an author on this paper
Click your name to claim this paper and add it to your profile.

Reviews

Primary Rating

4.4
Not enough ratings

Secondary Ratings

Novelty
-
Significance
-
Scientific rigor
-
Rate this paper

Recommended

No Data Available
No Data Available