Research on the Mechanism of Latent Demand Activation by Business Model Innovation: A Case Study of Tourist-Transport Center

The purpose of this paper is to elaborate the mechanism of latent demand activation by business model innovation. The business model innovation from traditional travel agency to tourist-transport center (TTC) includes two kinds of innovation: one is dramatic innovation or disruptive innovation, the other is incremental innovation based on new business model platform. These two kinds of innovation together have dramatically changed the structure of tourism industry by activating and transforming more latent demand into effective demand. By analyzing the case of TTC, the mechanism of latent tourism demand activation is explored. The paper outlines the general mechanism of latent demand activation by business model innovation. The main mechanism of latent demand activation by business model includes "hard power" and "soft power". Two types of power together activate and transform latent demand into effective demand by touching different levels of latent demand.