Cooperation Mode Selection And Optimal Room Controls Of Hotels And OTAs

The hotel industry has the characteristics of high investment, high volatility of market demand and the non storage of room service products. Therefore, the occupancy rate is very important to the hotel investment recovery. However, in recent years, the average occupancy rate and income of hotel rooms have been declining. Therefore, cooperating with OTA (Online Travel Agent) has become an important way to solve the problem for hotels in the "Internet Plus" era, where Online booking has become the trend. But, in recent years, the contradiction between hotels and OTAs has frequently occurred, resulting in the overall reduction of the hotel service supply chain instead. Today, the merchant model and the commission model are the main cooperation modes of hotels and OTAs, and the optimal room control decision in different cooperation modes is conducive to improve the hotel room occupancy rate and revenue, and reduce the loss in revenue arising from this channel conflict as well. Besides, the optimal decision of cooperation mode in the different situations, can not only coordinate the hotel service supply chain, but also improve the overall efficiency of hotel service supply chain and increase income of OTAs,so as to achieve a win-win situation and ease the collaboration between hotels and OTAs.Based on the background above, this thesis studies the problems of one hotel's best room control decisions of the two cooperation modes in different situations, and the optimal cooperation model decisions of one hotel and one OTA in the off-season, through Stackelberg game model, combining revenue management theory and the background of"Internet Plus", as well as considering the factors of hotel revenue management and hotel service supply chain management. The concrete research content mainly includes four parts in this study as followings.Without considering the different conditions of off-season and peak period, the third chapter and the fourth chapter in this thesis study the optimal room control decisions on the merchant model and commission model, where the conditions of the OTA and the hotel being leader respectively are included, and obtain the optimal solutions with deductive reasoning, backward induction and case analysis method. The chapter 3 obtains the optimal contract price, the optimal room limitation given to the OTA, and the optimal marketing effort level and room taken of the OTA. And the chapter 4 obtains the optimal commission,the optimal room limitation given to the OTA, and the optimal marketing effort level and room taken of the OTA. According to the results of this game, the optimal room limitation given to the OTA is actually equivalent to the optimal room taken of the OTA in these two chapters.Considering the different conditions of off-season and peak period, and the game model contains the factors of marketing efforts of the hotel and the OTA, the fifth chapter studies the optimal room control decisions under the merchant model and commission model in the off-season and peak period, and obtains the equilibrium outcome of the game and equilibrium strategies through the deductive reasoning and backward induction. There are two findings in the low season as well. The one is that the commission is inversely proportional to the ratio of price sensitive customers in the decentralized decision-making condition, but they are proportional in the centralized decision-making. The other is that the marketing effort cost of OTA is proportional to the ratio of price sensitive customers in the decentralized decision-making condition, but they are inversely proportional in the centralized decision-making.Considering the factors of OTA marketing efforts, the sixth chapter studies the optimal cooperation model decisions of one hotel and one OTA in the off-season, and obtains the optimal decision results of both parties in the different situations with the method of deductive reasoning, backward induction, numerical simulation and graphical method. This study coordinates the hotel service supply chain and achieves a win-win situation. One thing is more important that there has been no research on the optimal cooperation model decision between hotels and OTAs. Thus, it can be seen that the research content of this part is the biggest innovation and contribution in this study, not only providing scientific theoretical basis and having operation significance on decision support for hotels and OTAs in concrete cooperation strategies in the practice, but also providing a new research direction and research ideas for scholars.