Author(s)

Fei Du ¹

Affiliation(s)

¹ School of Business Administration, Guangdong Polytechnic of Industry & Commerce, Guangzhou, Guangdong, 510510, China

Corresponding Author

Fei Du

ABSTRACT

This paper studies the cooperation contract between tourism hotels and OTAs from the perspective of partner selection using the agent model. We give the decentralized decisions of hotel and OTA, and mainly discuss the effects of OTA's market share and market impact on the cooperative relationship between them. We find that there is a positive correlation between effort level and the maximal additional sales, and cooperation is conditionally profitable for hotels. If the hotels cooperate with OTAs that have very small or excessive market share, the profits will lower than the profits obtained without cooperation. In practice, the hotel can appropriate to reduce the commission fee, if the OTA has a strong market impact. While if the OTA's market impact is weak, the hotel need to charge a relatively high commission fee for each room sold through OTA. Additionally, hotels should select the most appropriate OTA to cooperate on the basis of the market environment and their own attributes.

KEYWORDS

Hospitality; Hotels; Online Travel Agency; Cooperative relationship; Partner selection

CITE THIS PAPER

Fei Du, Study on the Optimal Selection of Online Travel Agency to Cooperate for Hotels. Information Systems and Economics (2022) Vol. 3: 25-36. DOI: http://dx.doi.org/10.23977/infse.2022.030405.

REFERENCES

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