The Entry/Exit Real Options Model for the Tourism Industry: A Case Focusing on a Hot Springs Resort in Taiwan

Translated Titles





石東立(Tung-Li Shih);張國謙(Kuo-Chien Chang);傅屏華(Ping-Hua Fu)

Key Words

溫泉休閒觀光產業 ; 進入與退出策略 ; 實質選擇權方法 ; hot springs resort tourism industry ; entry/exit strategy ; real options approach



Volume or Term/Year and Month of Publication

12卷1期(2006 / 03 / 01)

Page #

1 - 22

Content Language


Chinese Abstract


English Abstract

This paper examines the optimal threshold for income uncertainty when dealing with entry-exit strategies for the hot spring industry in Taiwan's tourism market. Specifically, a new entry decision model will be developed based on the assumption that operating income growth follows geometric Brownian motion. In addition, the differences between the real options approach and the traditional net present value method are also discussed. When operating income surpasses the optimal exit threshold, foreign investors should stay in the hot springs tourism market in Taiwan. When operating income is lower than the optimal exit threshold, the foreign hot spring investor should invest the necessary exit capital and return to their parent country. To sum up, through the above analysis of the financial model of entry and exit strategies, this study expects to assist foreign investors in considering investments in the hot spring resort tourism industry of Taiwan, while at the same time increased the international tourism competitiveness of Taiwan and the Taiwanese Hot Springs in order for them to become an international holiday destination.

Topic Category 人文學 > 地理及區域研究
社會科學 > 體育學
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