Research On Optimal Decision Of Promoter And Hotel Based On Demand Promotion

With increasing competition of hotel, more and more hotels need to raise their demand.The third parties are chosen by many hotels to cooperate with, especially the online travel agency. However several dominant OTA have a great impact on the market, they not only ask for high commission, but also, to a great extent, control the sales channels of the hotels. To control the sales channel and reduce the cost, the hotels focus on their own online sales websites’ construction. But the network hit and click conversion of the hotels’ website are too low to help the hotels significantly reduce the vacancy rate of the hotels.Therefore, the hotels turn to the third party promoters, with the help of promoters, the hotels put their online ads which contain the link of the hotels’ websites and hope to increase the room demand. This makes it an importance issue to figure out the cooperation mechanisms and strategies between hotels and promoters.We developed a game model on demand promotion cooperation between the dominant hotel and promoters, the hotels pay for the promotion which would increase the demand. We review the background, current research, innovation and the theoretical basic in the first and second part of this article. Then we study the models based on three scenarios.In the third part, we developed a game model on demand promotion cooperation between a dominant hotel and a promoter. Under the centralized and decentralized scenarios, we present two parties’ optimal strategies and find some factors those influence two parties’ strategies. Also we propose a coordination contract that can improve profits of both sides and realize the perfect coordination of both sides.In the fourth part, we developed a game model on demand promotion cooperation between a dominant hotel and a promoter, based on asymmetric promotion cost information, analyse the promoter’s incentive of misreporting and points out the necessity of contract design. We propose a contract menu which can maximize profit of hotel and make the promoter choose the contract that is designed for his type.The fifth part is the extension of the third one, we consider a dominant hotel and two promoters and present third parties’ optimal strategies and find some factors that influence their strategies. Then propose a coordination contract that can improve profits of both sides and realize the perfect coordination of both sides.Finally we validate the effectiveness of all the contracts and show the sensitivity analysis of parameters through numerical examples...