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Hotel booking through online travel agency: Optimal Stackelberg strategies under customer-centric payment service

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  • Gao, Guang-Xin
  • Bi, Jian-Wu

Abstract

Facing stiff competition, online travel agencies (OTAs) are dedicating to provide customer-centric payment service in hotel online booking, which poses challenges for hotels and customers to make optimal strategies. This paper studies the optimal Stackelberg decisions and strategic interactions of a hotel and a customer in online booking through online travel agencies with customer-centric payment service. The results show that refund rate has great effect on the customer's payment decision, while transaction cost has great influence on the hotel's operational decision. When the refund rate is greater than a threshold, the customer prefers online payment. Being a leader in the Stackelberg game, the hotel can induce customers to choose the payment option with the lowest transaction cost by setting a refund rate.

Suggested Citation

  • Gao, Guang-Xin & Bi, Jian-Wu, 2021. "Hotel booking through online travel agency: Optimal Stackelberg strategies under customer-centric payment service," Annals of Tourism Research, Elsevier, vol. 86(C).
    • Handle: RePEc:eee:anture:v:86:y:2021:i:c:s0160738320302188
    DOI: 10.1016/j.annals.2020.103074
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    Citations

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    Cited by:

    1. Rong-Chang Jou & Yeong-Jia Day, 2021. "Application of Revised Importance–Performance Analysis to Investigate Critical Service Quality of Hotel Online Booking," Sustainability, MDPI, vol. 13(4), pages 1-18, February.
    2. Yuzong Zhao & Hui Wang & Zhen Guo & Mingli Huang & Yongtao Pan & Yongrui Guo, 2022. "Online Reservation Intention of Tourist Attractions in the COVID-19 Context: An Extended Technology Acceptance Model," Sustainability, MDPI, vol. 14(16), pages 1-17, August.
    3. Martin Petricek & Stepan Chalupa & David Melas, 2021. "Model of Price Optimization as a Part of Hotel Revenue Management—Stochastic Approach," Mathematics, MDPI, vol. 9(13), pages 1-16, July.
    4. Merkert, Rico & Hakim, Md Mahbubul, 2022. "Travel agency transaction costs in airline value chains – A risk in distribution channels in South Asia?," Annals of Tourism Research, Elsevier, vol. 95(C).
    5. Feng, Nan & Xu, Nan & Feng, Haiyang & Li, Minqiang, 2022. "Turn on instant booking or not? Decisions of rival hosts," Annals of Tourism Research, Elsevier, vol. 96(C).
    6. Shuqair, Saleh & Costa Pinto, Diego & Cruz-Jesus, Frederico & Mattila, Anna S. & da Fonseca Guerreiro, Patricia & Kam Fung So, Kevin, 2022. "Can customer relationships backfire? How relationship norms shape moral obligation in cancelation behavior," Journal of Business Research, Elsevier, vol. 151(C), pages 463-472.
    7. Sally Mohamed Amer, 2021. "The Effect of E-Servicescape, Website Trust and Perceived Value on Consumer Online Booking Intentions: The Moderating Role of Online Booking Experience," International Business Research, Canadian Center of Science and Education, vol. 14(6), pages 133-133, June.

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