A New Form for a Hotel to Collaborate with a Third-Party Website: Setting Online-Exclusive-Rooms

Abstract

The collaboration on hotel room booking service between hotels and third-party websites provides hotels much benefit on increasing capacity utilization. But the commonly used "first-come first-serve" (FCFS) form put hotels in a disadvantageous position especially when the websites have much more market attractiveness than the hotels. This paper proposes a new form named "setting Online-Exclusive-Rooms (OERs)" for a hotel to collaborate with a third-party website on room booking service. The form is presented by solving a two-stage decision problem: in the first stage, the hotel determines the quantity of OERs which can only be booked online through the third-party website; in the second stage, the hotel sets an acceptance policy to treat the additional request from the website. Analytical results indicate that "setting OERs" can improve the expected revenue of hotels compared with the current widely used "FCFS" form.

Optimal Service Commission Contract Design of OTA to Create O2O Model by Cooperation with TTA under Asymmetric Information

“…In the hospitality and tourism industry, because tourists have to experience tourism products offline, the O2O model achieved by the cooperation between OTAs and hotels or airlines is a common phenomenon. From the perspective of the supply chain, scholars more emphasize the sale cooperation between the OTAs and hotels or airlines and have gotten some effective cooperation strategies [1,[8][9][10][11]. In the retail industry, as the major characteristic feature of a product is tangible, it can be touched and tried out.…”

“…Clearly, the OTAs are an extremely important part of the tourism supply chain, recognized as an online distribution channel for hotels and airlines. A larger number of scholars have emerged to pay attention to the issue of the cooperation problem between hotels, airlines, and OTAs, such as pricing strategy, cooperation form, and coordination strategy [1,[8][9][10][11]. Koo et al point out that the airlines are less likely to use OTA platforms if the airlines have a large loyal consumer base or if the OTA platform is highly competitive [8].…”

“…e commonly used "first come first serve" form puts hotels in a disadvantageous position especially when the OTAs have much more market attractiveness than the hotels. Xu et al propose a new form named "setting Online-Exclusive-Rooms" for a hotel to collaborate with a third-party website on room booking service [11].…”

“…With the rapid development of OTAs, the online channel plays a crucial role in tourism and hospitality, and the tourism O2O model achieved by the cooperation between OTAs and hotels or airlines is a common phenomenon. erefore, there is a growing popularity on the cooperation problem between OTAs and hotels or airlines and they have gotten some effective cooperation strategies [1,[8][9][10][11]. However, to seek better business opportunities, OTAs have to attach importance to the offline service to achieve differentiation.…”

Online Travel Agency Channel Pricing Policy based on Dynamic Pricing Model to Maximize Sales Profit Using Nonlinear Integer Programming Approach

“…In the last few decades, many hotels have collaborated with online travel agency (OTA) to book hotel rooms in the tourism industry [1]. The challenges facing for the hotel is to utilize the OTA channel to maximize revenue by managing hotel room information, such as the offered room rate.…”