Coordination Contracts for Hotels and Online Travel Agents

Abstract

Herein, we address a common problem of hotels in the current world of online selling, namely the management of relationships with third party resellers (also known as online travel agents (OTAs)). We highlight the role of OTAs in the current travel landscape, and we discuss the popular contracting forms between OTAs and hotels, which are the so-called merchant and retail (commission) models. We illustrate how these contracts fail to coordinate the hotel–OTA relationship, and then, we develop a new type of contract that can efficiently coordinate a supply chain consisting of the OTA and the individual hotels. We provide theoretical results and numerical examples for a one-to-one model with one OTA and one supplier and a more realistic setting with an OTA selling to consumers on behalf of numerous hotel partners.

The Effectiveness of Travel Agent Contracts in Increasing The Number of Booking at The Café - International Buffet Restaurant

“…There was previous research that was similar to this study. The first research study about the coordination contract for hotels and Online Travel agents (OTAs) was conducted to determine the effective and efficient travel agent contract in increasing hotel revenue regarding a win-win solution (Guo, 2020). The second research is the study conducted to observe the social media marketing effort influence the travel agent on the travel agent intention to purchase travel buying (Gokdemir et al, 2020).…”