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The dynamics of online hotel prices and the EU Booking.com case

Author

Listed:
  • Andrea Mantovani

    (Department of Economics, University of Bologna, Strada Maggiore 45, 40125 Bologna, Italy.)

  • Claudio Piga

    (Keele Management School, Keele University, Staffordshire ST5 5BG, United Kingdom.)

  • Carlo Reggiani

    (Department of Economics, School of Social Sciences, University of Manchester, Manchester M13 9PL, United Kingdom.)

Abstract

This paper analyses the dynamics of hotel prices listed on Booking.com in the period 2014-16. This period is characterised by the most important antitrust decisions regarding the use of price parity clauses by online travel agencies (OTAs) in the EU. First, we document the dynamics of hotel prices on Booking.com in tourism regions of three EU member states: France, Italy, and Spain. The evidence suggests that prices decreased in 2015, the year in which the major antitrust decisions took place, whereas they bounced back in 2016. Second, we provide both a comprehensive explanation of the previous evidence and a rationalisation based on a theoretical model of the OTA sector. Overall, our overarching analysis of the price dynamics on Booking.com allows to explain both the impact of removing price parities and the possible response of the OTAs.

Suggested Citation

  • 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.
    • Handle: RePEc:net:wpaper:1704
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    Cited by:

    1. Hunold, Matthias & Kesler, Reinhold & Laitenberger, Ulrich, 2018. "Hotel rankings of online travel agents, channel pricing, and consumer protection," ZEW Discussion Papers 18-059, ZEW - Leibniz Centre for European Economic Research.
    2. Sean Ennis & Marc Ivaldi & Vicente Lagos, 2023. "Price-Parity Clauses for Hotel Room Booking: Empirical Evidence from Regulatory Change," Journal of Law and Economics, University of Chicago Press, vol. 66(2), pages 309-331.
    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. Cazaubiel, Arthur & Cure, Morgane & Johansen, Bjørn Olav & Vergé, Thibaud, 2018. "Substitution Between Online Distribution Channels: Evidence from the Oslo Hotel Market," Working Papers in Economics 8/18, University of Bergen, Department of Economics.
    5. José Múgica & Carmen Berné, 2020. "Direct and Indirect Tourism Online Channels. Do They Have a Different Potential for Customer Loyalty?," Sustainability, MDPI, vol. 12(11), pages 1-15, June.
    6. Steven Berry & Martin Gaynor & Fiona Scott Morton, 2019. "Do Increasing Markups Matter? Lessons from Empirical Industrial Organization," Journal of Economic Perspectives, American Economic Association, vol. 33(3), pages 44-68, Summer.
    7. Greg Taylor, 2020. "Competing Sales Channels," Economics Series Working Papers 843, University of Oxford, Department of Economics.
    8. Moreno-Izquierdo, Luis & Ramón-Rodríguez, Ana & Such-Devesa, María Jesús, 2018. "The challenge of long-term tourism competitiveness in the age of innovation: Spain as a case study," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 42, pages 13-34.
    9. Pulina, Manuela & Santoni , Valentina, 2018. "Hotel online pricing policy: A review and a regional case study," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 42, pages 93-111.
    10. Cazaubiel, Arthur & Cure, Morgane & Johansen, Bjørn Olav & Vergé, Thibaud, 2020. "Substitution between online distribution channels: Evidence from the Oslo hotel market," International Journal of Industrial Organization, Elsevier, vol. 69(C).

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    More about this item

    Keywords

    Price parity clauses; hotel booking; online travel agencies; Booking.com;
    All these keywords.

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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