| As the increasing consumers’ willingness to book online,more and more hotels,based on their direct channels,have turned to cooperate with Online Travel Agencies(OTAs)to form a“direct+OTA” dual-channel sales structure to distribute rooms.Although OTA channels help hotels to enlarge the market size and seize market share,hotels have realized that cooperating with OTAs is increasingly detrimental to them and considered adjusting the cooperation with OTAs due to the cannibalization effect of OTA channels on hotels’ direct channels as well as channel competition.Such adjustment from hotels has also attracted OTAs’ attention and they are also considering whether to adjust the cooperation model with hotels.Despite the increasing research interests in the cooperation between the hotels and the OTAs,one of the most significant features brought by adding the OTA channels has been ignored: the impact of online reviews.Consumers face valuation uncertainty when booking rooms as they cannot accurately perceive the quality level.Then online reviews posted on the OTA channels provide a quick and convenient way for potential consumers to search and compare products and services,thereby reducing uncertainty and become an important basis for potential consumers when making purchase decisions.Although many studies have analyzed the impact of online reviews on consumer choice behavior,studies regarding how online reviews affect the pricing,channel model,and business model for the hotels and the OTAs at the operational and managerial level by reducing consumers’ uncertain perception of the rooms have not yet been undertaken.Obviously,it is not scientific enough to ignore the influence of online reviews on the channel model and business model in the context of the “hotel+OTA”supply chain in the “Internet Plus” era.Due to the practical problems and the lack of theoretical research in the cooperation between the hotels and the OTAs,this paper,which takes the “hotel+OTA” supply chain as the research object from the perspective of supply chain management,studies the cooperation between the hotels and the OTAs under different channel models and business models by incorporating the impact of online reviews on consumer choice behavior.By comparing the profits of the hotel and the OTA,this paper analyzes the hotel’s and the OTA’s optimal sales channel strategy and cooperation strategy,respectively,and thus,capture the impact of online reviews on their adjustments regarding channel model and business model.The main work and innovations of this paper are summarized as follows:(1)By incorporating the impacts of online reviews on updating consumers’ uncertain valuation of the room,which in turn affect consumer choice behavior,as well as pricing behavior of the hotel and the OTA,this paper further studies how the hotel’s sales channel model adjustment among the direct channel only,an OTA channel only,and a dual-channel will be affected by such reviews.The results reveal that online reviews(for both the valence and perceived credibility)can have either beneficial or detrimental impacts on the hotel’s profit and,thereby,post significant impacts on the adjustment on the sales channel.Interestingly,when incorporating the impacts of online reviews,the hotel can still be better off by cooperating with the OTA even if doing so cannot help to increase the market size,which is contrary to conventional wisdom.Additionally,negative(positive)reviews cannot always inhibit(induce)a hotel from(toward)cooperating with the OTA,depending on other conditions.More specifically,as the room capacity becomes larger,the hotel is more willing to continue to cooperate with the OTA,even with negative OTA reviews;in contrast,due to limited capacity,the hotel will quit the cooperation with OTA and adjust the sales channel to single direct hotel channel,even with positive OTA reviews.(2)Aiming at the impact of the difference in online reviews between two competing hotels on consumer choice behavior,this paper constructs a supply chain consisting of two competing hotels and a single OTA,to study how online reviews and cross-channel spillover from the sales of OTA channel to the sales of direct channel affect the adjustment of contract type(a wholesale model or an agency model)as well as cooperation strategy(a uniform strategy which offers the same contract type to both hotels or a diversified strategy which offers a wholesale contract to one hotel while an agency contract to the other).The conclusions reveal that when the cross-channel spillover is positive or not extremely negative,a diversified strategy(specifically,the wholesale contract for the hotel with better online reviews while the agency contract for the other)will outweigh the uniform strategy when the difference in online reviews between the two competing hotels is larger;otherwise,the uniform wholesale contract strategy dominates.However,when the cross-channel spillover is extremely negative,the OTA prefers to offer an agency contract to the hotels even if a wholesale contract can alleviate upstream competition.(3)Because consumers will comment on room quality by weighing the benefits(e.g.,the quality level of the room)and the costs(e.g.,the price paid for the reservation),this paper considers a hotel sells the same type of room through an OTA within two periods,in which the OTA provides price-influenced online reviews that can affect the subsequent consumers’ uncertain perception of the room,the pricing behavior of the hotel and the OTA.As a result,the OTA will consider the potential impact of such reviews when deciding whether to adjust the business model.The conclusions reveal that under the agency contract,the hotel can give away the rooms for free to induce higher review ratings.Interestingly,a higher price effect on consumers’ ratings may mitigate double marginalization caused by the wholesale contract,thus benefiting both the hotel and the OTA.In contrast,a higher quality level intensifies double marginalization and hurts both the hotel and the OTA.Finally,with a relatively high commission rate,the OTA will adjust to a wholesale model when cooperating with hotels offering medium quality levels of rooms,while to an agency model when cooperating with hotels offering either high or low quality levels of rooms.The research results above can not only enrich and perfect the content of hotel revenue management theory but also provide a scientific basis for online marketing strategies. |
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