Sustainable service design and revenue management for electric tour bus systems: seoul city tour bus service and the eco-mileage program

Abstract

Sustainable tourism has true sustainability when it is designed economically and in an environmentally friendly fashion. A variety of methods has been explored to achieve sustainable tourism, and the use of new technologies is a significant trend for sustainable tourism. In the City Tour Bus service, an environmentally friendly tour service can be achieved by using electric buses. Moreover, the social energy saving program helps to reduce the economic burden of building eco-friendly services by providing economic incentives as rewards for environmental contributions. Two mathematical models are newly developed to quantitatively design and operate a sustainable City Tour Bus service. Mathematical model I is developed with two objective functions of minimizing total investment cost and CO₂ emissions. It derives from Pareto solutions with different number of electric buses and battery capacities. Based on the solutions of mathematical model I and the economic incentive from the social energy saving program, mathematical model II investigates the optimal unit service price. Proposed quantitative approaches are applied to the Seoul City Tour Bus service with Seoul Eco-Mileage Program. These new approaches are expected to build and manage sustainable tourism system in scientific way. Moreover, they will provide quantitative bridge between sustainable transportation system and social programs beyond tourism industry.

Keywords:

• Sustainable tourism
• electric vehicle
• tour bus service
• mathematical optimization
• system design
• revenue management

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Notes on contributors

Young Dae Ko

Young Dae Ko received the B.S. degree in industrial engineering and the PhD degree in industrial and systems engineering from Korea Advanced Institute of Science and Technology (KAIST), Daejeon, Korea, in 2004 and 2011, respectively. He worked at Data Analytics Group of Deloitte Consulting as a manager from 2013 to 2016. He has performed lots of industry projects concerning big data and business analytics. He is currently an Assistant Professor in the Department of Hotel and Tourism Management, Sejong University, Seoul, Korea. His research interests include business analytics, revenue management, system optimization and green transportation.

Byung Duk Song

Byung Duk Song received the B.S. degree in industrial systems and information engineering from Korea University in 2009 and PhD degree in Industrial and Systems Engineering from Korea Advanced Institute of Science and Technology (KAIST) in 2015. His research interests include system design, scheduling of UAVs, vehicle routing problem, manufacturing/remanufacturing process optimization, supply chain management.