Understanding the emergence and development of online travel agencies

A dynamic evaluation and simulation approach

Datos Bibliográficos

ID12420949
AutoresXingyang Lv (0000-0001-5025-7769, Southwestern University of Finance and Economics, autor de correspondencia), Nian Li (0000-0002-7615-4319, Southwestern University of Finance and Economics), Xiaowei Xu (0000-0001-5273-7483, Southwestern University of Finance and Economics), Yang Yang (0000-0002-3705-7612, Southwestern University of Finance and Economics)
Año2020
Volumen30
Número6
Páginas1783-1810
Fecha de publicación2020-07-27
Open AccessSí
TipoARTICLE
RevistaInternet Research (JOURNAL)
Identificadores de la revistaISSN: 1066-2243 • E-ISSN: 2054-5657
EditorialEmerald Publishing Limited (PUBLISHER • GB)
DOI10.1108/intr-11-2019-0464
OpenAlexW3044896726
IdiomaEN
Citas recibidas6
Referencias citadas74

Purpose With the explosive growth of the Internet, online travel agents (OTAs) have gained an increasing market share in the online booking market. However, OTAs are facing fierce competition from hotels' direct booking channels, as well as competition among themselves. Therefore, there is a need for an understanding of the evolution of the OTA market from a dynamic perspective. The purpose of this study is to investigate the long-term effect of OTAs on the hospitality industry and to find whether an equilibrium of this effect exists in the context of e-commerce. Design/methodology/approach To gain a better understanding of the OTA market process, a mathematical framework is constructed on the basis of four assumptions. NetLogo 5.1.0 is used to perform a series of numerical simulations. Findings The results indicate the following: (1) the development of the OTA market helps to improve net social welfare, but hotels (especially economy hotels) have suffered as a result; (2) clever exploitation of both online and offline channels that are based on hotels' historical data may improve hotels' performance; (3) a scale-priority strategy can be more helpful than a profit-priority strategy for enabling OTAs to maintain their long-term competitiveness; (4) the timing of participation in online-channel competition is a crucial factor in determining whether OTAs can achieve business success. Social implications In this study, it is shown how consumer habits have changed since the development of OTAs. The online channels provided by OTAs create a convenient, low-cost user experience, and they consequently improve the net welfare of customers. OTAs should be encouraged appropriately, although some economy hotels may suffer from the rise of OTAs. Originality/value In this empirical study, a mathematical framework is developed to describe the process of evolution in the OTA market, and it uses simulations as a means to validate prior research findings. Unlike previous studies, a dynamic perspective is used in this investigation to interpret the emergence of OTAs and to analyze their enormous impact on the hospitality industry. Thus, the findings of this study capture the competitive characteristics of online and offline channels in a network context and indicate potential strategies for the development of OTAs and which hotels may use OTAs to achieve better performance. In addition, the study findings could be easily extended to explain many of the classical economic phenomena regarding firms with intangible products

Business · Competition (biology · Context (archaeology · Economics · Industrial organization · Microeconomics · Profit (economics · The Internet · Computer Science · Consumer Market Behavior and Pricing · Digital Marketing and Social Media · Sharing Economy and Platforms · Marketing

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