Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/74322
Title: A comparison of the merchant and agency models in the hotel industry
Authors: Liao, P 
Ye, F
Wu, X
Keywords: Dual channel
Game theory
Online travel agency
Revenue management
Issue Date: 2017
Publisher: Wiley-Blackwell
Source: International transactions in operational research, 2017, p. 2 How to cite?
Journal: International transactions in operational research 
Abstract: In addition to a hotel's direct sales channel, the hotel can choose whether to use the online travel agency (OTA) channel, and run a dual-channel distribution system. For the hotel, selling rooms through OTA expands the available market, but comes at some expense, such as fewer allocated rooms for its own direct channel. In this paper, we formulate a theoretical game model to analyze the impact of various parameters on the channel and pricing decisions. We also compare the impact of form of contract, where the contract between hotel and OTA can be based on either the merchant or agency model. We show the impact of capacity on the hotel's channel choice. In the dual-channel system, we find that the OTA prefers the agency model over the merchant model when the hotel's capacity is small. We also propose a revenue-sharing contract that can achieve channel coordination for both hotel and OTA retailers under both models.
URI: http://hdl.handle.net/10397/74322
ISSN: 0969-6016
EISSN: 1475-3995
DOI: 10.1111/itor.12365
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