Scope for Sharing Economy within the Indian Tourism Sector

2.1 Introduction

This literature review delves into detail on the theories and concepts associated with tourism and the most pertinent literature regarding supply-chain models in tourism. This would particularly refer to the concept of sharing economy within tourism. This literature review has been segregated into sections, with each sections covering a particularly integral part of the review.

2.2 Tourism Model

It is imperative to understand the tourism model with a view to evaluate its purpose and initiatives associated with it. A model to define tourism was provided by (Leiper, 2004), wherein it was defined as a system which was founded on three dimensions like travel and tourism, space and tourist, the tourism industry on the whole. As per Polish literature, tourism supply chain (TSC) was the one which has drawn much attention and was developed by (Jonssons, 2005). An analysis of supply chain of tourism was carried out by the author from the perspective of marketing, emphasizing on the role of tourism product distribution process. This was clearly categorized as a linear model, which hinted at the sequential nature of the relation from manufacturers to tourists. This notion is directly founded on functional models that are involved in the production process and would not emphasize in a robust manner, particularly in tourism, and also the process of tourism supply.

2.2.1 The Three Dimensional Tourist Model

The tourism model as presented by Leiper, is indicated below;

Figure 1: Leiper's model of tourism

Source: Leiper (2004)

Through the three dimensional model, it is evident that a connection has been established between the tourist, the place where the movement takes place and the tools that facilitate such a movement. Thus, the approach presented by Leiper provides a perfect understanding about the notions associated with tourism initiatives. It offers a fundamental framework for interaction with every tourism aspect. A demand is developed by tourists which is catered via inter-connected events that leads to inter-dependence of all sectors such as cultural, psychological, management, economic and political (Zhuang et al., 2019). Thus, Leiper’s approach can be deemed as the supply chain model. A few concepts related to tourism is mentioned as under.

2.2.1.1 Tourist

Tourists are considered as the finite and definite component who intends to travel to a destination for some reason which could vary from person-to-person. The purpose for such tours could be business, medical, relaxation, economic, political, sports, leisure or others (Dilek & Dilek, 2018).

2.2.2.2 Space

Space has been classified as routes taken for travel, origin and destination. A tourist would travel from their point of origin to reach a destination, where the origin destination would motivate a traveller to undertake a particular travel; a place where tourist activity takes place and the transit routes linked with the tourists comfort from a particular point.

2.2.2.3 Travel and Tourism Industry

The system of interlinked initiatives which is associated with tourism services like accommodation and food, entertainment, transportation, and other inter-linked activities.

2.3 Notion of Packaged Service within the Sector of Tourism

Tourism has been defined as an experience of service, which is commonly established through many permutations of advantages, initiatives and interactions. It refers to the experience gained through traveller encounters and interactions at a very intimate level, while using the services of a service provider. At the conceptual level, such an experience could be referred to an assembly or package that comprises of a blend of services, interactions and products. For instance, it would comprise of the food which is served on flights, a tourist guide who is helpful by nature, friendly support staff at hotels, pleasing accommodation, friendly interactions with fellow passengers etc. All such aspects are inclusive of varied packages of tourism. Such products come along with varied aspects of service, and these kinds of services are associated with new physical items, it could be a service or provision of a service (Camilleri, 2018). Organizations that provide a product or service would in general provide a package that comprises of a blend of experiences, image, physical items, interactions and services. It has been argued by Alisher (2017), that marketing of neither goods nor services occur but rather the marketing takes place as a bundle of advantages. This would frequently comprise of tangible as well as intangible aspects. Simply said, a tourism package would include a total of all goods and services, and the interactions which a tourist might engage in at several points in time, while gaining new memories with regard to their tourism experience.

2.4 Tourism and Sharing Economy

Sharing as a concept has been in existence for a long time now (Belk, 2014). However, the notion of a sharing economy and collaborative consumption emerged with the introduction of the World Wide Web. In recent times, the notion of a sharing economy has entered in the tourism sector with a tremendous growth observed within businesses established on the notion of sharing economy. Though the notion of sharing goods and services is not a novel concept, however, the idea has experienced a growth with the internet and setup of online platforms that have made sharing comparatively easy than before. Over the past decade, a phenomenal growth has taken place in the number of companies that have endorsed and tackled such platforms, particularly within the market for tourism. A common example of such a platform within the hospitality and tourism sector can be found through AirBnB which allows tourists to book accommodations. The author also states that the tourism sector has witnessed a positive and a negative impact from sharing economy. Individuals or organizations in favour of a sharing economy in tourism advocate that it offers easy access to a whole range of superior quality services as compared to services offered by traditional organizations. On the other hand, those not in favour of a sharing economy hold the belief that sharing economy leads to the development of unfair competition, tax evasion, lowers security in jobs, and poses a major threat to compliance standards.

It has been emphasized by Mondal and Samaddar (2020), that the development of a sharing economy and its growth is largely driven by the presence of four key forces. The said forces comprise of recent global and national economic conditions, growing need for community engagement, innovation in technology and greater awareness amongst public about environmental deterioration. A confluence of these four forces does not just influence the creation of a sharing economy, but it also resulted in an increase in terms of adoption, while improving its attraction among the masses. From a tourism point of view, Kaushal (2018) states that the option of overall travel supply was broadened when a sharing economy was introduced. It is now possible to commence a tourism business by any person in a sharing economy, allowing access to a variety of services through online mediums. In addition, a large number of services that are available are not only cost-effective but it is also of higher quality, as compared to traditional businesses. Furthermore, a sharing economy is also known to offer more flexibility. A large majority of tourists now prefer such platforms due to the personalization it offers and also owing to the authenticity it provides. Also, a sharing economy is suitable for responding to the complexities of demand for tourism services.

2.5 Revenue Management

The model of revenue management of airlines has been extensively used within the hospitality sector. This can be attributed to the fact that the hospitality as well as the airline industry has common characteristics (price differentiation, unique customer segmentation, fixed capacity, and perishable products and services). Further, decisions pertaining to room pricing have been extensively analysed as price tends to have a major impact on customer accommodation and their choice decisions (Muthusamy, 2020). An examination of the influence of hotel pricing on satisfaction of guests was carried out by Chen et al. (2015). The findings indicated that when the price range of accommodation, food and beverages were low, it augmented customer satisfaction. At the same time, an opposite effect was observed when the price ranges were high. Ullah et al. (2019) investigated the mediums through which customers would make a hotel booking, either in a direct manner through the distribution channel of the hotel or indirectly using OTA. Though the background of the study by Ullah et al. (2019), is the same as this current study, their focus was on finding a technique for hotels to manage the availability of room for the cooperative OTAs. An analysis of how hotel characteristics impacted seasonality in prices for finding better hotel services and better star ratings that are linked with less seasonal variations in hotel prices was done by (Mitra, 2020). An investigation on the component of price with physical characteristics of hotel and the location, along with apartments were done by (Chang et al., 2019). They also conducted a comparison of its impact on the final price of the accommodation. Information pertaining to around 1000 hotels across Europe was gathered by Abrate et al. (2012), with the purpose of evaluating dynamic pricing strategies for hotels. The findings indicated that the structure of inter-temporal pricing hinged on the type of customers, suppliers, availability of rooms and star rating.

2.6 Relevant Theories

2.6.1 Resource-based Theory

Resource based theories are not exclusively restricted to an organization’s tangible assets alone. The associations developed by an organization are also engaged in tandem with value of assets, as such associations are deemed as the long-term relation of an organization that results in long-term advantages (Kruesi & Bazelmans, 2022). Members that operate within a common business window, with diverse segments in it are deemed as a business unit providing supplementary resources and capabilities. For example, a tourism service provider would provide all associated activities for a specific tour wherein activities would comprise of; accommodation, activities, excursions, ground-handling, transportation, food, crafts and events. A resource based theory would mainly stress upon situations that are prone to uncertainties that depend on strategic responses towards optimal resource allocation, tackling negotiated environments functioning across diverse organizations. Resource-based theories therefore create a need for developing inter-relationships between organizations, thus enabling mutual exchange of services for improving customer satisfaction (Rossignoli & Ricciardi, 2015). Inter-organizational associations are obtained through continuous exchange procedures which develops norms like mutual business objectives, commitment and trust, that acts as safeguards against opportunism. The relation provides a point of reference for establishing on-going terms for contractual practices while facilitating inter-organizational interactions.

2.6.2 Transaction Cost Theory>

Specificity among assets, uncertainty frequency and economic exchange signifies the key dimensions within a transaction. Therefore, organizations operating under some forms of governance like inter-organizational coordination, vertical integration or traditional market contracts based on costs of economizing transaction take key dimensions into account. This type of associations within organizations linked with the tourism sector, the intricate transactions increase the involved parties like accommodation providers, ground-handlers like recreation providers or amusement. These are some challenges that exist within inter-organizational associations for designing and executing a structure of governance that develops the much required coordination to attain the intended outcomes at low costs (Akbar & Tracogna, 2018). In this instance the initiatives undertaken by an organization needs to be safeguarded. As far as bounded rationality is concerned, its hybrid mode (or bilateral contracting) or internal organization or hierarchy could provide an enhanced performance in terms of governance when particular assets are significant (Espino-Rodroguez & Rodroguez-Doaz, 2017). In situations where uncertainty is deemed as important, hierarchies would be preferred as vertically integrating, as compared to coordination that occurred inter-firm. Arrangements that are hybrid in nature (for example cooperative arrangements) are considered to have a structure with insufficient authority for vertical or horizontal coordination. Considering this kind of asset levels and uncertainties in particular, as the right type of mechanism of governance is expected to be at the right place. A transaction cost theory tends to motivate organizations to look beyond their scope, anticipate the hazards and factors that support this type of contractual associations (Piboonrungroj & Disney, 2015).

2.7 Research Gap

This literature review has extensively deliberated various kinds of tourism models and theories associated with tourism. Though such concepts have offered an enhanced understanding about sharing economy within the domain of tourism, there is not much literature available that discusses or investigated a sharing economy within the domain of Indian tourism. This is apparently a clear gap in research which needs to be bridged.

References

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