Industry Update
Press Release30 January 2019

ZEW Discussion Paper: Hotel Rankings of Online Travel Agents, Channel Pricing, and Consumer Protection

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ZEW – Leibniz Centre for European Economic Research

We investigate whether online travel agents (OTAs) assign hotels worse positions in their search results if these set lower hotel prices at other OTAs or on their own websites. We formally characterize how an OTA can use such a strategy to reduce price differentiation across distribution channels. Our empirical analysis shows that the position of a hotel in the search results of OTAs is better when the prices charged by the hotel on other channels are higher. This is consistent with the hypothesis that OTAs alter their search results to discipline hotels for aggressive prices on competing channels, thereby reducing the search quality for consumers.

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About ZEW

The ZEW - Leibniz Centre for European Economic Research in Mannheim is a non-profit and independent institute with the legal form of a limited liability company (GmbH). Founded in 1990 on the basis of a public-private initiative in the Federal State of Baden-Württemberg in co-operation with the University of Mannheim, ZEW is one of Germany's leading economic research institutes, and enjoys a strong reputation throughout Europe. ZEW pursues four key objectives:

  • To conduct research of the highest quality
  • To provide scientifically grounded economic policy advice
  • To train up-and-coming economists, and
  • To inform the professional and lay public

The institute addresses on decision-makers in politics, business, and administration, scientists in the national and international arena as well as the interested public. Frequent surveys on the situation on the financial markets and the business situation of the information economy as well as the large-scale annual study on innovation activities in the German economy are representative for the different types of information provided by ZEW.

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