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The impact of a new online channel: An empirical study

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  • Lu, Qiang (Steven)
  • Yang, Yupin
  • Yuksel, Ulku

Abstract

This paper investigates the impact of adding a direct online channel on a firm and its intermediaries. We develop a set of testable hypotheses and then empirically test them on a longitudinal transaction dataset from the hospitality industry. Our results show that the introduction of a direct online channel significantly reduces the price premium charged by intermediaries, and the impact varies across consumer segments and product markets. More interestingly, we find that, after the adoption of a direct online channel: (1) the intermediaries are not necessarily worse off; (2) price dispersion increases for products sold through both intermediaries and direct channels; and (3) the price dispersion increase is higher for products sold by intermediaries.

Suggested Citation

  • Lu, Qiang (Steven) & Yang, Yupin & Yuksel, Ulku, 2015. "The impact of a new online channel: An empirical study," Annals of Tourism Research, Elsevier, vol. 54(C), pages 136-155.
    • Handle: RePEc:eee:anture:v:54:y:2015:i:c:p:136-155
    DOI: 10.1016/j.annals.2015.06.006
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    2. 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).
    3. Matthias Hunold & Reinhold Kesler & Ulrich Laitenberger, 2020. "Rankings of Online Travel Agents, Channel Pricing, and Consumer Protection," Marketing Science, INFORMS, vol. 39(1), pages 92-116, January.
    4. Hunold, Matthias & Kesler, Reinhold & Laitenberger, Ulrich & Schlütter, Frank, 2018. "Evaluation of best price clauses in online hotel bookings," International Journal of Industrial Organization, Elsevier, vol. 61(C), pages 542-571.
    5. Álvarez-Albelo, Carmen D. & Hernández-Martín, Raúl & Padrón-Fumero, Noemi, 2017. "Air passenger duties as strategic tourism taxation," Tourism Management, Elsevier, vol. 60(C), pages 442-453.
    6. Huang, Huiling & Liu, Stephanie Q. & Kandampully, Jay & Bujisic, Milos, 2020. "Consumer Responses to Scarcity Appeals in Online Booking," Annals of Tourism Research, Elsevier, vol. 80(C).
    7. Hao Huang & Yide Liu & Dong Lu, 2020. "Proposing a model for evaluating market efficiency of OTAs: Theoretical approach," Tourism Economics, , vol. 26(6), pages 958-975, September.
    8. Andrea Mantovani & Claudio Piga & Carlo Reggiani, 2017. "The dynamics of online hotel prices and the EU Booking.com case," Working Papers 17-04, NET Institute.
    9. Quaglione, Davide & Crociata, Alessandro & Agovino, Massimiliano & Iaia, Lea, 2020. "Cultural capital and online purchase of tourism services," Annals of Tourism Research, Elsevier, vol. 80(C).
    10. Qian Jin & Hui Hu & Xiaozhi Su & Alastair M. Morrison, 2021. "The Influence of the Characteristics of Online Itinerary on Purchasing Behavior," Land, MDPI, vol. 10(9), pages 1-19, September.
    11. Carlotta Mariotto & Marianne Verdier, 2020. "Platform–merchant competition for sales services," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 29(4), pages 834-853, October.
    12. Simović, Olivera & Rađenović, Žarko & Perović, Djurdjica & Vujačić, Vesna, 2020. "Tourism in the Digital Age: E-booking Perspective," Proceedings of the ENTRENOVA - ENTerprise REsearch InNOVAtion Conference (2020), Virtual Conference, in: Proceedings of the ENTRENOVA - ENTerprise REsearch InNOVAtion Conference, Virtual Conference, 10-12 September 2020, pages 616-627, IRENET - Society for Advancing Innovation and Research in Economy, Zagreb.
    13. Mantovani, Andrea & Piga, Claudio A. & Reggiani, Carlo, 2021. "Online platform price parity clauses: Evidence from the EU Booking.com case," European Economic Review, Elsevier, vol. 131(C).

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