Cooperation and competition between online travel agencies and hotels

Abstract With the advent of O2O (online to offline) mode, Online Travel Agency (OTA) websites help to introduce new customers to hotels. However, since OTAs charge a hefty commission, hotel managers hope returning customers can book future visits from hotel websites instead of OTA websites. The study is to investigate how OTAs and hotels cooperate and compete with each other at the same time in the multichannel environments. The results show that OTAs can attract new and returning customers by website service quality while hotels can attract returning customers by perceived value. On the other hand, OTA website service quality has a negative effect on intention to rebook via hotel websites and the intention to rebook via OTA and hotel websites indeed have a negative relationship. Thus, the two channels compete with each other for customers' future visits.

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