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Effects of Competition and Quality on Hotel Pricing Policies in an Online Travel Agency

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  • Miguel Angel Ropero García

    (Departamento de Economía Aplicada (Estructura Económica), Facultad de Ciencias Económicas y Empresariales, Universidad de Málaga, C/El Ejido 6, 29071 Málaga, Spain)

Abstract

This paper explores the effects of competition and service quality on pricing behaviour by hotels and tourist apartments in the Balearic and Canary Islands, Spain via an online travel agency. The results show that the price set decreases as the number of competitors increases and that the establishments offering higher quality service set their prices at a significantly higher value than other establishments. These effects increase in absolute value across the price distribution.

Suggested Citation

  • Miguel Angel Ropero García, 2013. "Effects of Competition and Quality on Hotel Pricing Policies in an Online Travel Agency," Tourism Economics, , vol. 19(1), pages 63-76, February.
    • Handle: RePEc:sae:toueco:v:19:y:2013:i:1:p:63-76
    DOI: 10.5367/te.2013.0189
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    References listed on IDEAS

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    3. Michael R. Baye & John Morgan, 2001. "Information Gatekeepers on the Internet and the Competitiveness of Homogeneous Product Markets," American Economic Review, American Economic Association, vol. 91(3), pages 454-474, June.
    4. Stiglitz, Joseph E, 1987. "Competition and the Number of Firms in a Market: Are Duopolies More Competitive than Atomistic Markets?," Journal of Political Economy, University of Chicago Press, vol. 95(5), pages 1041-1061, October.
    5. Oliver Fabel & Erik Lehmann, 2002. "Adverse Selection and Market Substitution by Electronic Trade," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 9(2), pages 175-193.
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    Cited by:

    1. Agnes L. DeFranco & Cristian Morosan & Nan Hua, 2017. "Moderating the impact of e-commerce expenses on financial performance in US upper upscale hotels," Tourism Economics, , vol. 23(2), pages 429-447, March.

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