Price Movements: Online Versus Onsite

• Activity Number: 78
• Type: Contributed
• Date/Time: Sunday, July 29, 2012 : 4:00 PM to 5:50 PM
• Sponsor: Business and Economic Statistics Section
• Author(s): John Marcis*+ and Bomi Kang
• Companies: Coastal Carolina University and Coastal Carolina University
• Keywords: Pricing ; Third-Party websites ; Online Travel Agents ; Hotel Management

Abstract

On-line travel agents (OTAs), such as Orbitz, Travelocity, and Expedia, allow consumers to gather information regarding price and non-price attributes for a number of travel suppliers in a near-costless manner. Hotels use projections from historical data or known pending events and consistently monitor the demand for their rooms. Although hotels want to sell rooms through their own website, the hotel industry relies heavily on OTAs to sell their rooms. This study examines the manner in which price data changes over time for five (5) hotels via both OTAs and site-specific websites in ten (10) Standard Metropolitan Statistical Areas. The data are gathered over a six-month period for reservations of various lengths and are used to examine the manner in which hotel operators attempt to maximize room revenues while controlling room inventory. The empirical findings will be disseminated and the implications will be discussed at the 2012 the Joint Statistical Meetings.