Optimal Channel Strategies For Service Providers With Availability Of Opaque Channel

The rapid development of information technology has made it much easier for customers to book travel-related service like hotel rooms and airline tickets online.In the traditional case,customers can get all the detailed information including the price and the provider of the service on the OTA(online travel agency)platform and accordingly make their purchase decisions,and we call it the direct distribution channel.However,a new distribution channel called opaque channel has appeared in recent years,in which channel customers can not have all the detailed information but can enjoy a lower price because of this opacity.There are two forms of opaque channel: PP(posted-price)and NYOP(name-your-own-price).When the OTA introduces the opaque channel in her platform,service providers must decide whether to participate in this channel or not.Because the lower price in the opaque channel will attract more customers to buy,also induce some customers to flow into the opaque channel from the direct distribution channel,the trade-off should be considered in the operations management for OTA and service providers.In this thesis,we study the optimal strategies for the service providers by integrating the customer segmentation and its preference towards different service providers under the singlechannel and dual-channel cases.We find that for both forms of opaque channel,participating in the opaque channel will be more profitable when the price is relatively high in the direct distribution channel,otherwise,service providers can obtain more profits without the opaque channel.What's more,by comparing PP channel with NYOP channel,we also find that PP channel is more beneficial than NYOP channel for service providers.