This study develops a model of the market life cycle of package tours, explaining that such tours inherently have low tourist satisfaction which results in a decrease in market share. The model is based on the proposition that tourist satisfaction depends on the extent to which their preferences are fulfilled at the destination, which in turn is determined by their knowledge of its attributes. An analysis of data on China’s outbound tourism market from 1993 to 2010 shows that as tourist satisfaction at the destination increases, the market share of inclusive package tours declines. This suggests that tourist satisfaction can predict tourists’ subsequent choice of a package tour. As tourist satisfaction increases due to the improved information in the market, such package tours will be gradually substituted for independent travel or entirely new packages, or replaced by travel to a new destination.

• Kaye Chon(The Hong Kong Polytechnic University)
• Haiyan Song(The Hong Kong Polytechnic University)
• Markus Schuckert(The Hong Kong Polytechnic University)
• Yong Chen(Ecole hôtelière de Lausanne)